Anya Kamenetz writes in a new column available online that student loan debt could be similar to the mortgage bubble. Student loans total about 830 million dollars. That’s larger than all the credit card debt in the United States. Nontraditional student are often hardest hit. I quote Ms. Kamenetz –
From where I’m sitting, the buildup of the national student loan balance looks like a massive betrayal of trust. People have been told for decades that this is “good” debt. In fact it’s really, really bad debt. Increasingly, high unmanageable debt burdens are falling on those least prepared to deal with the stresses and costs of college: the so called “nontraditional” adult, working-class student who is more and more likely to attend for-profit colleges that cost an average of around $14,000. And 40% and higher of these students are defaulting.
If, as a nation, we are going to increase our graduation rate, we will have to find different ways of financing. The current system with nontraditional students defaulting at a 40% rate is neither sustainable nor in any way effective.
In an article on the ABC World News site, they outline the grim statistics of U.S. graduate rates, 12th in the world.
Nationwide, 40.4 percent of 25- to 34-year-olds held such degrees in 2007, falling far short of Canada’s 55.8 percent, as well as South Korea and Russia, both of which had 55.5 percent rates, according to statistics from the College Board.
I firmly believe our current method of student borrowing is a drag on the graduation rate. It’s a drag on the decision to go to college. There are some people that believe owing a half million dollars for a medical degree is not a good investment.
If college graduation rates are a good measure of national success then why do we discourage people from going to college in the first place? As a policy it is a good idea for only the well-off to go to school?
Right now, someone is reading this article and saying, “They can work while going to school, I did, look at me. I did it on my own.” Or some other method of self help. The statistics are clear, self help is not effective. The more we rely on it, the fewer graduates we are going to get. As citizens in common, as members of a human community we have duties to one another and helping people get ahead by means of an education is one of those responsibilities.
Should the United States which was first in college graduation rates ten year ago decide to abandon its position as a successful nation, a good formula is to have a system where educational endeavor is tied to large debt loads.
Tell me the name of another nation any where on earth that finances college attendance by loans of the size and weight we have here. Borrowing for an education is not something I am opposed to, but education should be financed by a wide variety of methods, so that student loan debts are manageable and limited in size.