Our economy is currently facing the biggest student loan debt in history, and it doesn’t help that students are unable to find jobs after they graduate. Many young people are told not to worry about school related cost while in school, there is plenty of financial aid; but it is mostly made of student loans. This is causing people to be unable to make loan payments after graduation. According to a recent article on student debt by Nisa Muhammad, Americans now owe more than $875 billion on student loans, that’s more than Americans owe on credit card debt! College seniors in 2009 had an average debt of $24,000. And it doesn’t help that many people believe that the quality of education today is a ‘joke’ and diminishing greatly from what it used to be.
The debate on this issue is: whether or not a college ‘bubble’ exists. Co-founder of PayPal and investor in Facebook, Peter Thiel, created the Thiel Foundation encouraging 20 students under 20 to drop out and peruse ‘innovative scientific and technical projects’. Thiel argues that, “Tomorrow will not take care of itself. In order to solve vexing problems and increase the quality of life for people everywhere, the world’s economy needs continuous scientific and technical innovation from outstanding creative minds. I’m looking forward to helping the Fellows become the next generation of tech visionaries.” His idea is that higher education will suffer from the housing bubble; inflation of real estate, prices soared then crashed back down. And he says this now threatens to hit higher education similarly.
But is Thiel’s prediction right?
Many scholars argue that he is not. Higher education is not tradable; you can not flip higher education like you can a house. People with student loans have to work them off, there is no getting rid of it by selling it.
The problem I see is that students are chasing their college American dreams without worrying about cost and taking on high debts. Today, the Obama Administration is releasing regulations that require programs to better prepare students for employment. Intuitions will now be required provide more information to prospective students such as: total program cost, loan repayment rates, graduates’ debt to earning ratio, and other information to better help students choose programs that are right for them.
I feel that the regulation changes for the college and career programs by the Obama Administration can be very helpful to students coming in. I just hope that students in the future will better consider cost and loan repayment rates before choosing a school.
Articles for more information:
The debt students aquire from student loans is most of the time, more money then they will see their first year out of college. I feel as if student's aren't understanding how hard it is to pay these off, but most of them view the loans as an investment and not credit.
ReplyDeleteA couple weeks ago I went to a scholarship meeting at USF that focused on how to make yourself standout nationally against others who are competing for the scholarships too. One of the ways to look more appealing was to be involved in a research study with a faculty member on campus. Now research is extremely time consuming and requires at least 5-8 hrs of study outside of school. I had an interest in this and wanted to see what it was all about so after the meeting I pulled the adviosr aside and asked her how I can go about it. I told her my only problem is that I work full time to pay for my college tuition and it would be difficult to take that much time off work. She proceeded to tell me ,"Well you need to cut corners where you can, even if that means taking out a loan." I honestly could not believe she said that! So I am supposed to take out a loan for school to do research to apply for a scholarship that I'm not even guarnteed of getting? i just couldn't believe she was advocating a student taking out a loan! I think loans should be your last resort. Not something you think of because they are easily accessible.
Needless to say, I threw that idea out real quick.
This post is very depressing :( But, very real and pertinent to our generation. I enjoyed this post, it is factual, to-the-point, and informative. Unfortunately, by the time I graduate, I will be just under the "average" loan debt and that's with "75%" Bright Futures (yea, not really 75% anymore). It is hard to turn your head to loans when you know they are the only answer to an education. Loans not only help students pay tuition but costs of books and entrance tests! Also, as much as they pretend to be, scholarships are not offered to everyone. I found myself very limited when applying to scholarships because of my race, gender, and background. Because I am not a minority, don't have military experience, and have not had any real hardships in my life I couldn't apply for the majority that are offered. This is a real problem of today's youth and your post does a great job of highlighting this.
ReplyDelete@Nicki B that's a great example! I know that I have heard many adults give me the same advice, that its ok...just take out a student loan if need be. But no! That is the very idea that is going to have us paying off school for the next 30 years instead of buying homes and raising families.
ReplyDeleteIt is depressing that so many students will end up with loans and still not have jobs after graduation, and it is unhelpful that there are limited scholarships depending on color or family.
This post was kinda depressing but very informative. Lately your post about the lack of jobs and now the debt we are in just makes me wonder if I should just move to another country. Education is great but is it really worth the money we are paying? something to think about.
ReplyDelete