Debt undermines the economic and social value of college education
It's no secret that student loan debt is a rapidly growing problem. Democratic presidential candidates have a campaign issue out of debt forgiveness.
When almost half of the borrowers aren’t repaying their loans, the benefits of college are hard to see. The “college for all” movement has promised students and parents socioeconomic mobility and a better future, but the ugly reality has left many students worse off than if they had skipped college altogether.
Unsurprising, those former students are in difficult economic circumstances. The TICAS report noted that defaulted borrowers are more likely to live in poverty, be a college dropout, have a dependent child, be a first-generation student, and be black. These students weren’t taking out large amounts of debt, either: 52 percent of those who defaulted borrowed less than $10,000.
What the struggle to repay student debt shows is that the promise of college as a way out of poverty, for many, is myth more than reality.
To be clear, the students struggling the most are not the average student, but they are a significant group. The students with the most student debt are generally fine; they can pay it off, even if it takes decades. But the students who suffer the most are students from low-income families who thought that college was the key to their economic mobility.
What debt appears to be doing, then, is trapping the poor in a box from which there's no escape. This only worsens the inequality populists of all stripes rail against. As the article makes clear, there are possible options for lessening the debt burden, if not avoiding it entirely. But big changes must occur -- from governments, students, and higher education institutions. But until those changes are embraced, we have to accept a terrible truth about college education:
America’s experiment in access-at-any-cost college has failed. If one of every 10 borrowers default on their loans, and almost half of borrowers aren’t paying down their debts, this shows the rot within higher ed. Ever-increasing costs, carried more and more by students, to finance ever-expanding universities, cannot continue without a future crisis.
One intriguing option:
It may be time to embrace a definition of education that isn’t monopolized by colleges and universities. Trade schools, apprenticeships, and direct work experience could benefit many students now pursuing a traditional bachelor’s degree.
We strongly agree.