They were told: “Liberal arts degrees are coveted by employers – it means you know how to think critically.”
They were never exposed to shop classes. They were taught to look down their noses at the trades. They were told to avoid “selling out” to earn a living. They were told that working for a nonprofit was somehow more noble than working in the job-creating private sector.
And they were told – and encouraged – to go $100,000 in debt to earn that degree.
Do you blame the 18-year old who’s now in his mid-twenties, buried under a mountain of debt and unable to find a job?
Or do you blame the parents, educators and college counselors? Do you blame a higher education system that has no downward pressure on costs?
It’s officially a crisis. Student loan debt has hit the $1 trillion mark, exceeding Americans’ total credit card indebtedness. Unemployed graduates with huge loan balances are camping out in “Occupy” camps — the Hoovervilles of our age — around the nation. And President Obama, perhaps afraid those camps will be dubbed “Obamavilles,” as indeed they have already been by some, has unveiled a new proposal that promises to help graduates who are drowning in debt.
The real problem is that we’ve been running a higher education bubble, one that — like the real-estate bubble — has been pumped up by cheap government money. Since 1999, student loan debt has increased by 511%, while disposable income has increased by only 73%.
That’s because when the government subsidizes something, producers respond by raising prices to soak up as much of the subsidy as they can. College is no exception. Tuition has been increasing much faster than disposable income, and families — believing that a college education is a can’t-lose investment, much as they used to think houses were — have been making up the difference with debt. After all, we’re told, student loan debt is “good debt,” because a college degree guarantees more earnings.
Tell it to the Occupy Wall Street protesters, many of whom note that they’re deep in debt for fancy degrees that didn’t get them jobs.