John Oliver explains why so many students in the US acquire such large college debts and have a hard time paying off their loans. It is a familiar story. A government program meant to serve a good end is handed over to the supposedly efficient private sector to manage, which then turns out to be both inefficient and corrupt and results is people making loan payments for decades while making hardly a dent in the principal.
Oliver says that Joe Biden, over the objections of Republicans and obstacles placed by the US Supreme Court, has actually managed to eliminate or reduce student debt for a considerable number of people.
When watching that, I was absolutely stunned that some people still owe 90% of their debt after having paid more than the initial amount in installments over a decade. That says clearly that the interest rate on student debt is so high that it is more akin to that given by a loan shark.
A thing like that should not be legal and it certainly isn’t moral.
I am wondering where the common sense and the parents came in? My two kids went to community college and then transferred to the state university for their last two years. The 32-year-old’s entire school tab was $24k, the 29-year-old’s was slightly higher at $27k (state u tuition went up). We paid half, they paid half, and both graduated with no debt.
One of my coworkers had a daughter who simply had to go to an out-of-state, private college to study…art. $70k/year tuition plus rental on studio space. Ran up a $260k debt…is working at a discount retailer because…she’s just not that good at art. The coworker is always carrying on about the injustice of school loans.
The Bridgewater College tuition is $41k. It’s a private college in Virginia. The U of VA is half that.
John Oliver makes an excellent point that a lot of students have a loan debt of $25k or less, but what he left out are the countless people who believe their children deserve to go to a college or university that’s absolutely out of their price range, and it’s particularly egregious if the child wants to study something that can be studied perfectly well in less-expensive places or if the child wants to study something that will offer no job prospects.
If people avoided student loans, they wouldn’t have to worry about paying it back. And much of this is on the parents for not raising the children to understand basic finances. If a child wants a new pair of shoes for running around in the summer, does the parent spring for the $40 sneakers or the $2500 ones endorsed by the child’s favorite sports star/rapper/celebrity? If the family has plans to go out to dinner and the teen demands they go to the restaurant with the steak wrapped in gold leaf, do the parents just smile and say “No problem! We’ll get a second mortgage on the house!” No, they say something along the lines of, “No, that’s not in our budget.”
But, when the child wants to study something that has absolutely no opportunity for employment after graduation and declare they simply must do it at a school whose tuitions and fees cost more than a house every year, why don’t the parents step up and say, “No, that’s not in our budget”?
@Katydid,
While I understand what you are saying, there are a few of aspects which do deserve some consideration.
First, something which Oliver does not touch on, where is the money going? If the tuition is going up, but the professors are not getting additional pay, where is the money going? Do all the increases in student tuition reflect the reduction in government investment in education? Or is that money being used for other purposes? Building new laboratories, classrooms, student housing? Okay, some of that makes some sense. Building stadiums to attract more money for their sports, well, that makes less sense. Salaries for administrators/coaches which run into the millions? That doesn’t make any sense at all. The excuse I hear is that colleges need top administrative talent in order to get donors, so they are competing for people who otherwise would command similar salaries at corporations.
I call hogwash on that. Corporate boards are already over-paid, and university administrators who come from the corporate world appear to lousy at administrating universities. There appears to already be a cadre of professional university administrators who threaten to move into the corporate world. Let them. Cut the top pay for administrative staff to the $200,000 range, and you’ll find competent administrators who also understand the differences between running an educational institution and a business. People who do it because they believe in the value of an education, not because they are aiming to get rich.
A close look at university finances would probably uncover other very expensive costs which are not related to education. Just as an aside, I do think scholarships for sports are a good idea. It can allow people who would have a difficult time attending university an opportunity. But sports scholarships should be accompanied by educational attainment requirements. These do not have to onerous, but they need to exist (and I understand that in most colleges they do).
It is quite likely that if the money which students pay for education is only used to give students education, the amount of money needed, tuition, could go down.
Then there is the second aspect. Your comments suggest that the purpose of education is to prepare people for a job once they leave school. After 35 years of experience in the workforce, I can say, unequivocally, that a large number of jobs today which ‘require’ a college degree were filled by people without a college degree in the past. In my own case I was hired as an engineer without having an engineering degree. Not as a Professional Engineer, which is a subset of actual engineers and can be personally liable if a problem occurs, but as an automotive design engineer. I had the skills, and the knowledge, which I learned in the USAF, to perform all the tasks required. I was originally hired as a technician, but within six months I was moved into an engineering position because I demonstrated my skills. I have subsequently gotten a B.S. and a Masters, but 30 years ago it was still possible to be hired as an engineer without an engineering degree.
But mine is not a special case. There are a lot of jobs where the tasks are specialized for the position, and no amount of university training would prepare a person for them. In fact, I would hazard that most jobs are that way. Every administrative assistant, or secretary, I’ve known, had a different set of tasks. Sure, they all had to know how to type, but some kept track of prototype builds, others handled purchase orders, others scheduled nurses, others managed payroll, others simply filed documents. These tasks are specific to a position, and any replacement needed to learn those tasks. Requiring a degree to be placed in that position is ludicrous. Similarly, requiring a degree for people working in a purchasing position doesn’t really make much sense. Your anecdote about the person studying art, they could step into those positions, and may be seen as more qualified than others simply because they have a degree. When a degree is not needed for those positions.
Next, I have a different view than you about the purpose of an education. At the root, an education is about learning how to learn. Much of education is about learning how different parts of the world work. How science, literature, religion, politics, engineering, law, culture, all these things and more, intersect, interact, and result in the world we occupy. As I see it early education, basically all education prior to university, should teach a person enough about how the world works for them to successfully operate in it. This includes reading, writing and basic arithmetic, balancing a checkbook and other basic finance skill, basic food preparation skills, bodily health and why it matters, the processes of reproduction and how to encourage/avoid it, a basic understanding of how government/laws work, an introduction to physical processes like chemistry, thermodynamics, inertia, how to operate a motor vehicle, and many other things. Students who have the time and interest can get more advanced courses in things like government, history, art, sciences, engineering, etc. But the purpose of this initial education is to teach children how to successfully operate in their current society, and expose them to other areas where they may have an interest.
Students who have an interest should be able to attend a secondary education which focuses on that interest. But that secondary education will still be bringing in topics of how that interest relates to other subjects in the world. So a student looking for a BA in tuba will also be taught history, economics, law, government, chemistry, mathematics, etc. Some of this will be necessary for additional studies, knowing a little metallurgy can help understand how the instrument works better, knowing some economics will help them understand why they might find it hard to make a living once they graduate. The subject matter is still painted with a fairly broad brush, but it is more specific to the interest of the student.
Each additional level of education, Masters and Doctorate, narrows the scope of study and deepens the knowledge within that scope. This is why people who have doctorates in economics are less likely to spout off about laws of supply and demand than people who have only taken Econ 101, the people with doctorates generally know how the gross law of supply and demand has thousands of special cases and while it’s a good concept to teach, things like prices in today’s market are not really set by demand. Of course, there are exceptions. This is also why dilettante studies are not usually as reliable as doctoral studies. A dilettante can have an immense knowledge of minutia in a very specific area, but miss how it relates to a larger picture. Doctoral studies are (supposed) to help students see multiple views/sources/information. I’ve known dilettantes who could rattle off all the battles Napoleon fought, and not only who won but what could have gone differently. I am amazed at their detailed knowledge of that aspect of the Napoleonic wars. But they are completely at sea when a discussion of attempts by French citizens to avoid conscription during that time are brought up. I would hope that a person with a doctorate on First Empire France would have at least been exposed to such knowledge.
In my view, the purpose of education is not to enable people to get employment, but to give people the skills to navigate in our world and to advance knowledge and understanding of our world. Individual people may not pursue that goal very far, they may be content with gaining an understanding of the requirement of our current culture. However, people who are interested in exploring more, in advancing knowledge, should be allowed to do so.
And they should be allowed to do so at the expense of society. All of us benefit by the advancement of knowledge. It does not matter if that knowledge is in mathematics, physics, economics, or sculpture, theater, or painting. I’ve known people who studied art, even graphic art, who’s skill at representing their ideas is dreadful. They have an interest in something, but have never transferred that interest into a skill. That doesn’t make the knowledge they acquired any less valuable, or the ideas they try to convey any less interesting. They usually end up in a field outside of their studies, but so what? Let them have their passion and maybe they will generate something spectacular.
Sturgeon’s law still applies, 90% of everything is crap. But how do you get more good stuff? By allowing more people to pursue their passions, if 10 of 100 pieces of art are good, how do you get more good pieces of art? By allowing people to make 200 pieces, then 20 of them will be good.
Education should not be tied to getting a job once the education is completed. The cost of education should not be borne by the student either, as all society benefits from citizens being educated. In Book 5 of “The Wealth of Nations” Adam Smith says that one of the best uses of the increased income to a monarch is increasing the education of the citizens, and most serious economics since then have echoed that sentiment.
Our current uber-capitalist society views capitalism as the approach/solution to all facets of our society. The tenets of unrestrained capitalism are entwined with more than just business, but also with religion, government, education, and even individual’s feeling of value. These beliefs, and they are no more than cultural beliefs, need to be disentangled from the structures of our culture which do not benefit from them, which are being strangled by the capitalist ethos. In some areas capitalism can provide some benefits to society, in areas like utilities, shelter, transportation, and food distribution, but these areas need tight regulation because these are necessities for human life. In other areas, like education and government, capitalism really has no place, it provides no benefit to society, and must be removed from those branches of our culture before it strangles them.
In the end, Katydid, I understand your position and viewpoint. But I think we can do much better.
flex @5
I agree with all you said, I would add that bodily health should include at least a basic understanding of where different organs are and how they work so that people are more able to understand what is wrong with them if they have poor health.
Far more importantly I would like people to understand that what the learn in school, even at university level is not all there is to a subject; twined with that that it is ok to admit you don’t know something, and that that the knowledge you gained in school may prove to be wrong, which is also ok as long as you don’t insist what you were taught is correct.
@Flex: I agreed with most of what you said.
I do not see any need for organized competitive sports in colleges/universities whatsoever. They virtually all (with like 9 exceptions) lose money for the school and the costs and the entitlement it breeds in the athletes is long-documented. I went to a small branch of my state U, which offered a gym with a pool, a running track, and a basketball area all built into the same building. Those were for the students because they didn’t have sportzballz teams. What they did have was unofficial intramural sports: the school provided an empty field and a baseball diamond along with some basic sports equipment, and students were free to form their own teams for baseball, soccer, and rugby. Games were played by whoever showed up, and there was enough interest that most dorms had at least one team of people.
Likewise, the branch of my uni mandated taking classes in three out of four of the fields of study: math (which included computer science because it was that long ago), science, social science (history/sociology/psychology), and English/foreign languages. There was nothing stopping a student from taking classes in all the areas of study, but before graduating, a student had to have classes in the required three out of four.
I went to college during St. Ronnie Ray-gun’s regime and my freshman year was the first one that in-state students had to pay tuition. Minimum wage was $1.85/hr and the first semester’s tuition was $800, scaled up to $1800 by my last semester. I was on my own to pay for college, which meant some brutal workweeks in addition to classes, which is why my kids started at community college, where one knew what they wanted to study from Day One and the other bounced around a bit before figuring it out. It’s much better to explore and go down blind paths at $3k/year than $75k/year.
College shouldn’t be all about the career, but it should prepare the student to begin to earn a living. And parents who say, “But my kid WANTS the $70k/year college experience” is just as stupid as the parent who says, “But my kid WANTS the Bugatti--to HECK with the used Honda Civic!”
Sorry--didn’t finish the analogy (it was clear in my head LOL).
So, the kid wants a Bugatti--not because they want to be a racecar driver, but because it looks like fun. And the family doesn’t have Bugatti money; they have used Honda Civic money. So the parents say, “Sure, we’ll take out exorbitant loans from sketchy companies that we’ll spend the next 20 years paying back, because darn it, my kid DESERVES a Bugatti!”
@Katydid,
I think I know what you are saying, that some families look at student debt as a bragging point. I’m sure some do. Bragging about hardships is a ubiquitous human activity. I admit to doing that on occasion myself. There was an old “Far Side” cartoon where Frankenstein’s Monster was sitting a bar and the typical human guy next to him is saying, “You call that a scar? Look at this!”. I have a couple friends who my wife and I laugh about how they always try to one-up us. We tell about an experience we had and they always respond with their own experience of the same nature, but their experience is grander. If we had a cold, they had the flu. If we took a trip to Toronto, they took a trip to LA. If we made cookies, they would tell us told about the superb, but horrendously difficult to make, cookies of their own. They aren’t doing this to belittle us, from what I can tell they do this in an attempt to feel more important than us. My wife and I are not important, and I’m happy to let them have those feelings. It doesn’t hurt us any.
Sure, a parent who takes out an exorbitant loan to pay for a child’s education, a loan which they can’t afford and they should know better than to take out, those parents have done something idiotic. And it’s hard for them to admit they did something idiotic, so they brag about it; “I took a second mortgage on our house to pay for my daughter’s Masters degree in nineteenth-century chamber pot designs!”
I would only be mad at such people if they expected me to chip in to help pay for their foolishness. Of course, that’s what student debt forgiveness appears to be; my tax dollars going to pay off the debt assumed by someone else. But that’s not really what is going on. The idiot’s debt is a line entry in an account book somewhere. That debt is an asset, according to GAAP, and technically that asset can be used by the federal government to offset it’s own debt. However, as the issuer of currency, the federal government doesn’t need that asset. Forgiving all the student debt owed to the federal government would put the debt-servicing companies out of business, but it wouldn’t impact the federal government’s ability to issue bonds, pay it’s employees, invest in infrastructure, provide domestic or foreign aid, pay for our military, etc. The federal government doesn’t need that debt to be payed back to do anything. The entirety of student debt is not preventing or allowing spending in other areas. None of the money you are paying in taxes goes to forgive student debt. The issuer of currency operates under different rules and conditions than an entity which uses that currency; be that entity a person, household, a business, or a corporation.
There are also some real economic benefits for student debt forgiveness. The money which is currently paid into debt-servicing entities, which is undoubtedly making their CEOs wealthy, would be spent on other goods/services. Consumer spending drives the economy, significant accumulation of money into few hands slows down economic growth. We are operating in a debt-driven consumer economy right now, and there is probably a limit to how much consumer debt can be used to drive economic growth. That limit is ostensibly the point where debt payments + the cost of living equals income. But I know households where two people hold down three jobs in order to keep spending, so I don’t know how close we really are to that limit. Are we going to see communal living where six or eight people pool their resources from the ten jobs they hold? That’s possible. Student debt forgiveness is one way to push us back from that limit.
So, yeah, the people who over-extended themselves to pay for a child’s education which does not prepare a student to earn a living are idiots. And they don’t make it any easier to sympathize with them either by bragging about it, or complaining about it. If they would admit that they were an idiot when they mortgaged their house for a Bugatti which the kid wrecks a couple years later it would be somewhat bearable. But when they act proud, or demand a bailout, it’s hard to be sympathetic. They made the choice, and all choices have consequences. But there are larger benefits to student debt forgiveness, and no downsides (aside from cutting off wealthy people from getting more wealth). This means I’m willing to help not only the people who were not thinking when they signed on for the loan, but also the idiots and assholes who should have known better.
But better yet, if a person is really enthusiastic about a subject, giving them the opportunity to study it, maybe to advance our knowledge of it, shouldn’t be restricted to rich people who can afford whatever tuition costs, or their willingness to mortgage their homes or their future. Even if the subject is nineteenth-century chamber pot design.
Cheers!
@flex, clearly I’m failing at getting my ideas across, and I apologize for giving you the wrong impression. My POV isn’t at all that some people are bragging about debt. My POV is that people are leaping for the prestige or indulging their kids who simply “MUST!” attend a ridiculously overpriced school. If the family has takeout pizza money but the kid demands a gold-leaf steak, the parents are ridiculous if they nod and smile and get the steak. At my house, we gave our kids the talk that we had saved up $X toward their college--when it was used up, that was it, there wasn’t any more and the rest was up to them. This was the same as birthdays: the birthday present budget was $Y, and the kids were free to spend it on one big present to several smaller presents, or save it and put the money toward something more in the future.
I don’t see a lot of that going on in the larger society.
I agree with you that people are acting aggrieved at a debt they *chose* to take on themselves. What did they think was going to happen when they signed loan paperwork?
Both my kids are employed and living in their own homes, which they were able to afford because they went to college and got degrees in fields that provide a living wage. One’s an electrical engineer, the other a computer scientist. They went to different branches of the state university because one branch had a better engineering program and the other had a better comp sci program. The comp sci one discovered in high school that she loved ballet but was never, ever going to be star quality, so she took and still takes ballet classes the way someone else subscribes to streaming services or buys videogames. For enjoyment, not at a $70k/year college.