At a time where one of the few job choices for the youth of this country is to either flip hamburgers at a greasy spoon or line up as cannon fodder in oil wars, you have to wonder if the American dream has not become an American nightmare. Corporations enjoy record profits and little to no taxes while the next generation is kicked to the curb…
Sadly, suicide is the avenue many young people take to escape this parasitic and cut-throat political economy of ours. Yes, we eat our own young by way of the for-profit college industrial-complex.
Student loans can’t be discharged in bankruptcy. Credit card debt has even led to some untimely deaths. Why are we condemning our young people?
This week’s credit check: The average undergraduate student graduates college with $4,100 in credit card debt and $19,300 in student loans. Suicide is the second leading cause of death among college students…
President Obama’s recent budget proposal included ending an experiment that gave out Pell Grants for summer courses and eliminating a subsidy for paying interest on student loans for current grad students. That looks mild, of course, compared to what the GOP proposes to do — cut the maximum grant payment by $845, end funding to other aid programs, kill AmeriCorps entirely, and slash billions from agencies that support academic research.
But as explained in “Up to Our Eyeballs“, the cuts to grants isn’t exactly new. Grants have been declining over the last thirty years as loans came to replace them in financing college educations. Two-thirds of financing used to come from grants, in fact, and now two-thirds comes from loans — which is to say, taking on debt. The book notes, “The maximum [Pell Grant] award today covers about one-third the average expense of tuition and fees at a four-year private college, and only 22 percent of all grant recipients actually get the maximum.” Meanwhile, tuition is climbing — it rose 122% at public universities from 1986 to 2006. The average graduate leaves college with $19,300 in student loan debt, up from $9,250 about ten years ago.
And now loan defaults are on the rise. A new federal analysis shows that about one-quarter of students who took out loans to attend for-profit college defaulted within three years of starting repayment. That rate is also up for public colleges — at 11%, up 10% from the previous report — and private nonprofit colleges — at 8%, up from about 7%. This may come as little surprise with an unemployment rate of 9%. Indeed, while in some ways college graduates are better off than those without a degree, they’ve still seen the highest percentage increase in unemployment. It can be hard to keep up with loan payments when you can’t find a job. And unlike most forms of debt, student loan debt is with you forever — you can’t discharge it in bankruptcy. In fact, “Up to Our Eyeballs” notes that about 9% of Americas aged 45-64 still have student loan debt.
That’s all bad enough, but going to college also opens up another Pandora’s box of debt: credit card offers. Students graduated college with an average of $4,100 in credit card debt in 2008 and half of all undergraduates had four or more cards. In the 2006 movie Maxed Out, mothers Trisha and Jeanne recount how both of their children went off to school and were hit with tons of card offers — even though neither student had much income or any credit history. Neither parent had any idea what was going on, but eventually one of them had racked up 12 different cards and the other was behind on the very first card she got. In the end, both children killed themselves out of the desperation of not being able to pay off their debts. Suicide is disturbingly common among this age group: it is the second leading cause of death among those aged 15-24, and the rate has increased 200% for this group over the past 50 years. The reasons are complex and varied, but one cause can be financial strain…
We live in the age of bubbles. Condemning our children to suffocating debt right off the bat with little prospect of meaningful employment is another sign of a society that it morally and ethically bankrupt.
The Student Loan Bubble:
“Since 2009 student loans (non revolving consumer loans) have increased from 100 billion to 450 billion. The green dashed line shows where this debt should be based on the historical trend line and as shown below the student debt held by the US Federal government has ballooned in the past few years. This is what a bubble looks like.” – link
With all of the other problems we are leaving the next generation(climate change, an oligarchic economy, peak oil, the sixth mass extinction, etc), you would think that we would at least try to help them out in their education, but if we really cared about them and the future, then we would not be carrying along with business-as-usual, our heads planted firmly in the sand, while the very habitability of the planet hangs in the balance.
The youth are on their own. Climate change has become a campaign slogan, nothing more…