The Cost of an Education

Matt Taibbi’s piece in this week’s Rolling Stone hit dangerously close to home. Titled, “Ripping Off Young America: The College Loan Scandal,” the article muckrakes the sad, cold reality faced by much of my generation – the reality of college debt.

Taibbi details how, as the President and Congress pat themselves on the back for preventing college loan interest rates from doubling this summer, the real problem lies hidden beneath the surface, so huge and obvious it’s invisible. The end message: Interest rates aren’t the reason 38 million Americans have outstanding student-loan debt, it’s the price of college itself.

I am beyond fortunate to have had my college education paid for. My paternal grandparents, who were never afforded a chance at college, set up an educational trust that allowed me and my cousins to go to just about any school we could get into. They foresaw the value of a degree, the gift of letting us pursue our dreams, and, perhaps most importantly, the privilege of not entering the real world with five or six figures of debt on our shoulders.

Many are not so lucky.

The price of tuition in America has grown at two to three times the rate of inflation over the last decades. Taibbi said that the average graduate leaves school with $27,000 in debt, and just since his article was published, a report from the Wall Street Journal says that figure is actually closer to $40,000. Behind only the real-estate market, the $1.2 trillion of outstanding student-loan debt is the largest sum of money owed in America.

The culprits: colleges and the government.

Even, if not especially, state-funded colleges like the one I just graduated from, which whine about declining state-assistance and say they are “forced” to raise tuition every semester to keep above water, spend obscene amounts of money on things they don’t need. The term is called “gilding,” where the school pours cash into athletic programs, celebrity professors, and unneeded facility addition, renovation and beautification projects in what Taibbi calls a “never-ending race for positional status.”

For example, my alma mater, the University of Colorado Boulder is in the middle of a $63 million renovation to the rec center with a pool in the shape of a Buffalo. This comes just after  finishing the $84 million Center for Community, a building that I still have no idea what it’s for except offering the luxury of hand-rolled sushi to freshmen on the meal plan . The university also just announced plans for a new $40 million building called the Center for Outreach and Engagement, which from what I can tell will centralize academic advisor offices and serve as a starting point for tours.

Totally necessary, guys, thanks.

All of those projects can be thanks on the tuitions of out-of-state students who pay between $43,000 and $47,000 a year with room and board. The same deal at Harvard costs just over $50,000.

Then there is the government, which as the sole lender of college loans will make $184 billion in the next 10 years. When Obama cut out banks as middlemen in 2010 – a good thing to do in itself – the government ended up making more money for itself.

Call me a socialist but the government profiting from student debt is downright absurd when I’ve studied in a nation like Denmark, where my friends not only attend university for free, but they are actually paid to do so. Such a seemingly bold strategy is not an act of welfare, it’s an investment in a healthy middle class society of competitive, well-educated, financially stable workers and innovators.

tumblr_mkdrl1CykN1rhyb5ao1_500

Unapologetic liberal Taibbi attests that both progresses and conservatives should be outraged by this system. He says liberals should hate the system for the “predatory tactics of lenders and sleazy way universities rely upon loan-shark methods to keep themselves in fancy new waterfalls, swimming pools and tenure-track jobs.” Conservatives should hate the system “most of all” for being a hidden tax, subsidy that artificially keeps bad institutions in business, and an example of “arbitrary government power seizing.”

Meanwhile, the primary victims are the students who agree to the terms of the loan at an age when they are barely capable of doing their own laundry, let alone understanding that they are committing to the equivalent of a first mortgage.

According to Taibbi, this problem is so severe that economists fear that if the bubble bursts, it could single-handedly bring down the economy. And even if that doesn’t happen, students are dealing with those debts right now, legally disallowed from declaring bankruptcy, something even gamblers can do.

As more and more debt piles on the backs of my generation, the smart kids are going to be ones who don’t go to college, and I fear the implications of what happens next.



Comments are closed.