Higher education saddles college students with intolerable student debt

Written by: Carl Fedorko

I was arguing with the God of the Mercer Bookstore, who took a female form that day, about why I didn’t need a receipt to exchange the book I had for the book I needed. “They’re identically priced. I just want to use the dollars I already paid you for this book,” I thump the history text like it’s a bible, “on the book I need. You can have this one, I don’t even want it.”

The Bookstore God said no. I say “You’re basically stealing my hundred bucks. You know you won’t buy this book back at the end of the semester.” She rolled her eyes and said “The book you want, it’s not even in stock. Won’t be here for a week.”

Before I said anything to her that I wouldn’t have said in front of my grandma, I had a realization: since the college let more students take the class than they had books available, there was no point arguing the anti-logic of such a flawed system. And I had already endured enough financial stress that day.

Earlier, the Bursar had falsely accused me of owing money from last semester. “A scholarship covered my tuition last semester.” They didn’t care. They pushed the ‘Fuck you, pay me’ button that comes standard on every non-student Mercer computer, and were not going to relent until I walked the bureaucratic Bataan Death March that is clearing up a financial error at a college.

Leaving campus that night I got to thinking, a potentially dangerous undertaking at Mercer: “I can’t be the only one who thinks the “college system” feels a lot like a robbery. ‘Education’ meant bettering myself, but true self-improvement wouldn’t feel like getting ripped off,” I thought on my drive home.

“I bet this is how guys who buy ‘male-enhancement’ products from late-night infomercials feel when the pills don’t work. How could I be bettering myself if I was getting ripped off the whole time?”

Simple. Because I was. At least, that’s the idea we all accept.

American colleges and universities sell young people the idea of success at unsustainably high prices. “You deserve this education you can’t afford!” Student loan debt is considered “good debt,” a concept that could only take hold in America. I would argue there is no such thing, but students keep buying into the system and it often fast-tracks them to financial ruin.

A 2013 study by Center for American Progress says the cost of a four-year public education has increased 250 percent in the last 30 years. Meanwhile, the average US household earned just 13.5 percent more money in 2012 than it did in 1983 according to the US Census Bureau.

If American wages increased at the same rate colleges raised tuition, the average household would earn $112,342 a year, which is more than double the current average. (All monetary figures in the above paragraphs are adjusted for inflation to 2012 rates based on the Consumer Price Index as calculated by the Bureau of Labor Statistics)

We, The People, are being priced-out of higher education.

The system is predicated on the idea that students are buying their way into gainful employment upon graduation, but we all know that’s not true anymore. So, if the guarantee of a job, the one benefit that separated the educated from the uneducated, doesn’t hold true anymore, why is the cost of college increasing while the value of a degree seems to be decreasing?

Because states can cut funding for higher education, raise the cost of tuition, allow students to go into debt, and then blame “the recession” when you can’t find a job in your state before your student loans are due.

An April 2012 report called The Great Cost Shift: How Higher Education Cuts Undermine the Future Middle Class by John Quinterno and Viany Orozco for DĒMOS, a public policy think-tank, shows how state disinvestment in public higher education in the last 20 years has shifted costs to students and their families.

As state funding declined, “institutions have balanced the funding equation by charging students more,” the report found. It also says the real price of two-year colleges climbed by 71 percent since 1990. Your education costs you more when your state values it’s colleges less and decreases funding to them.

Smaller colleges like Mercer typically lack the financial endowment/golden parachute necessary to stay viable regardless of decreased state funding. What this means is that a stable, predictable enrollment is the largest, most reliable revenue source for small, state-funded colleges. I think this fact gives colleges zero incentive to graduate or transfer students out because the more time a student spends at a school, the the more stable and predictable that schools enrollment is.

Since the school can’t guarantee the number of new students who enroll will equal the number lost to transfer or graduation, the financially secure strategy is bring in as many students as possible while retaining as many as they can.

The system is isn’t designed for students to graduate “on time.” This goes double for students at “two-year colleges” who often balance education with employment and can’t manage 12 credits per semester, the federal definition of full time student.

In The Rise of the Five-Year Four-Year Degree, May 2011, Columbia University Assistant Professor Judith Scott-Clayton asks what she says “should be an easy question: How long does it take to earn a four-year degree?” The answer? At least five years.

“It’s certainly better to complete college in five or six years than never complete at all. But stretching out a four-year degree means extra years of tuition costs, and additional years of labor market earnings and experience forgone.”

Clayton cites overcrowding and a lack of incentive for institutions to get students out faster as factors that increase time-to-degree completion. She also points out that students on financial aid pass their college bills on to taxpayers.

Educational debt is the new Poll Tax. Debt is no longer an investment in your future; for most people it’s the only option.This cycle continues ad infinitum. That’s the scam. Lenders don’t care if you can find a job when you graduate. They’re looking for you to pay what you owe.

Massive lending institutions like Sallie Mae have been accused of making a purposeful effort to increase student loan debt through the practice of forbearance.

Here’s an example of forbearance: you hypothetically owe $50,000 to Sallie Mae. If they push back the day your loan comes due by a year, it sounds like you’re getting a break. What’s really happening is the interest is running for that whole year, and what’s more, it’s running on the full amount of the loan instead of a partial amount. It may benefit you in the short-term but the lender takes more of your money in the long-term.

Sallie Mae was not convicted of any crimes due to circumstances that, if detailed here, would add several thousand words to this article.

Sallie Mae earned $937 million in 2012. “More than 600,000 federal student loan borrowers who entered repayment in 2010 defaulted on their loans by 2012,” according to Federal statistics reported by Ticas.org.

Graduates earn paltry entry-level salaries that limit participation in the US consumer culture.

The Consumer Financial Protection Bureau (CFPB) released Student Loan Affordability: Analysis of Public Input on Impact and Solutions in May 2013.

The study addresses the potential impact of the student debt burden, finding “…young consumers have been unable to participate more fully in the housing marketplace; the segment of young consumers…interested in becoming first-time homebuyers…face new barriers to home ownership.”

When long-term debt is a requirement for a stable future, how promising does the future really look? Student loan debt is going to financially cripple the purchasing power of the Millennial Generation.

There are too many cracks in the higher education system to focus blame on a single entity. The whole economic mind set that values goods based on scarcity and buying things you know you can’t afford is, by nature, unsustainable. The American financial system ensures the people who most benefit from the status quo are the least inclined to change it.

Education has its unimpeachable benefits but if you have to borrow money to pay for it, it’s easy to think the only way to win this game is to not play it, and you might be right.

I’m not so arrogant as to think I have the solutions to all the problems I see, or even worse, to try and tell you what to do with your life. I know that being informed and choosing inaction does nothing to improve the plight of those afflicted; charity will never be as effective as reform; our generation has the duty to either change an unfair system or admit that we found apathy more attractive than involvement. I know which side I want to be on. You decide for yourself.

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