Contributors

Sunday, May 06, 2012

Whither Student Loan Debt

The ever venerable and eternally handsome last in line emailed me this article recently regarding student loan debt.  The piece gets right to its point very quickly.

Ms. Romine's $900-a-month loan payments eat up 60% of the paycheck she earns as a bank teller in Beaufort, S.C., the best job she could get after graduating in 2008. Her fiancé Dean Hawkins, 31, spends 40% of his paycheck on student loans. They each work more than 60 hours a week. He teaches as well as coaches high-school baseball and football teams, studies in a full-time master's degree program, and moonlights weekends as a server at a restaurant. Ms. Romine, now 26, also works a second job, as a waitress. She is making all her loan payments on time. They can't buy a house, visit their families in Ohio as often as they would like or spend money on dates. Plans to marry or have children are on hold, says Ms. Romine. "I'm just looking for some way to manage my finances."

A stark outlook, indeed.

Most of you know that I respond well to personal stories like this. Ms. Romine is no doubt a primary source on this issue. But I think the point last was trying to make in sending me this (and he can certainly correct me in comments) is that young people should put off college until they have worked for a couple of years to earn money to pay for it rather than go into massive amounts of debt. I disagree and here's why.

Setting aside the concern that I have that taking a gap year might lead to dismissing a college education, time is very much of the essence here. We are in a very critical point as to how we fit as a country in the emerging and ever shifting global marketplace. You can damn well believe that BRICS aren't skimping on education for their young people. In fact, they are sending them all here so when they come back home, they are ready to improve their country's competitiveness in the world. This is why each one of those countries is likely to be quite powerful as we shift into a new, multipolar world.

Obviously, people entering college need to be smarter about the loans they take out. More importantly, schools need to charge less money. 1 trillion dollars in debt smells like one giant racket akin to most health care markets. Of course, this makes me wonder how the right would react if the federal government capped tuition on colleges. Would they blow a bowel and say that it distorts the market? Or would they cheer that the Commies who run the schools finally would be less powerful? Graduating seniors should also consider community colleges and technical schools as lower cost options to a preliminary education before moving on to get a bachelor's degree.

But not having a college degree or delaying the pursuit of one is not a fucking option. If you can't get on board with the United States needing to stay competitive with BRICS, then take a look at the unemployment numbers for non college graduates compared to an individual with a bachelor's degree.

7.9 percent compared to 4.0 percent. 

Essentially, if you have a bachelor's degree, you have just as much of a chance of getting a job as you would in a normal economic environment. Without one, it's going to be tougher.

So, I sympathize with Ms Romine but how much of her debt is her fault? After all, aren't people supposed to take responsibility for their choices?

9 comments:

juris imprudent said...

It is amazing how close you can come to actually learning something, and then just avoid doing so at the last possible second.

Is the market for college education already distorted by govt regulation [hint: non-dischargeability of student debt in bankruptcy]? Is there deceit about career earnings differences (i.e. after adjusting for paying off student loans, or is it just discussed in gross earnings)? How can a college degree be a differentiator within the national economy when everyone has one? [Hint: does a bank teller or mechanic need a college degree to compete in a global economy with BRICs.]

Mark Ward said...

What's amazing to me is that we can't seem to have a discussion without the government being the center of the fault forever and ever amen.

juris imprudent said...

What's amazing to me is that we can't seem to have a discussion without the government being the center of the fault forever and ever amen.

Hey stupid - where did I fault the govt? You brought up market distortion as though none currently exists. You are the one that says everyone needs a college degree to compete globally with the fearsome BRICs.

What is up with you - you used to show the ability to comprehend some things. Now it is pure boneheaded partisan hack-assery without the slightest trace of reading comprehension. You must be terrified by what might be coming in Nov.

last in line said...

It's late and I don't have time to type up much more than I said before. Saving the world starts at home, and I take care of #1 (my family) before I start worrying about the BRIC nations, who all have their own set of problems.

I wouldn't advocate that people take a year or two off - they'll probably never go back. The point I tell young people is that you need some skill that is in demand in the workplace, and you don't have to spend $80k on a 5 year party to get a skill that allows you to pay the bills, have a secure career and take care of numero uno.

Oh I agree that the debt is her fault. She was sold a bill of goods that said you HAVE to have a bachelors degree and that the degree will pay for itself in increased earnings. That's not the case anymore, and who cares how the right would react.

Mark Ward said...

Yeah, what you are doing up so late?:)

I agree with your call for needing skills. And I also agree that you don't need an 80K education to pay the bills and have a secure career. Smaller and cheaper schools are fine too.

I disagree, however, with the brush off of BRICS. Worrying about "home" means something more than Minnesota or the US these days. Home is the whole world as decisions made in Europe, for example, resonate at my kitchen table.

Hey stupid - where did I fault the govt?

Is the market for college education already distorted by govt regulation [hint: non-dischargeability of student debt in bankruptcy]?

You must be terrified by what might be coming in Nov.

I'm not terrified at all about November. What do you think is coming? A libertarian or Tea Party revolt? I'm just frustrated, juris, that the answer to the problem is always less government.

juris imprudent said...

And you think that is faulting the govt? Talk about being a reactionary ideologue! If you had half a fucking clue you would've realized I opened up a line of argument against the Republicans who passed that particular provision. Jesus you are an idiot.

juris "bully weasel" imprudent said...

Cat got your tongue? Lost interest in this subject? Blew your wad?

Larry said...

Mark's right. Most everyone needs a degree. We're falling behind the BRICS in robot ass technology!

Seriously, though, education is important, but "degree inflation" is rampant. Many degrees are worthless. Many students are pushed into college that have no business being there, whether from innate abilities or because their high school diplomas aren't worth squat and they are nowhere near prepared. There is a higher education bubble and it's being driven by similar pressures as caused the housing bubble. It will pop, too.

Mark Ward said...

. Many degrees are worthless.\

I agree. We need more science, match and tech students and less underwater basket weaving majors.