Daydreams To Default: The Downward Spiral Of Higher Education
In 1992, the U.S. government officially established a student financial aid program as the Free Application for Federal Student Aid — or FAFSA — during reauthorization of the Higher Education Act of 1965, which gave clearance to most student programs in the United States. The establishment of FAFSA changed the landscape of student loans forever, introducing banking agents to intervene between the government itself and students looking for a way to finance their education. Fast forward 50 years, and the current status of student debt is a mountain compared to the grain of sand it once was. With student loan debt now topping nearly $1.3 trillion dollars, the highest in the country, outranking even credit card debt and second only to mortgage debt, just how bad is the current state of higher education and the student loan crisis?
According to a Forbes report in 2013, the burden is crippling.
“Student loan debts[have been pushed] to dizzying new heights, as they now account for the second highest form of consumer debt behind mortgages,” wrote the magazine in August that year, as students across the country made their way to their respective college campuses (certainly not a comforting start-of-year send off). “With the federal debt at $16.7 trillion, student loan debts measure at 6% of the overall national debt … no small figure, and national debt carries many consequences including slowing economic growth (translating into fewer jobs being created) and rising interest rates. “ Capital, they explained would “not be as easy” to get your hands on.
Overall national outlook aside, what did that debt mean for students themselves, on the ground level? With a bevy of complaints against the current system of lending, which jacks up interest rates and leaves students, who took the loans to cover the obscene costs of obtaining a contemporary college education, in the dust for years, the outlook is nearly enough to make many consider alternate paths to employment. Surely, for the millions who leave school with a diploma and job offers from fast food joints and coffee shops only, the situation has gone from bad to downright soul-crushing.
“The costs for students attending a public university rose from $688 in 1978 to an average of $8,655 in 2013,” explained former Youngstown State University President Les Cochran in an op-ed for The Hill in May. “At private universities, student costs escalated over the same thirty-five years period from $2,959 to $29,056. Universities did nothing to change; they plodded along like the proverbial dinosaur acting as if nothing had changed.”
There were ways that universities could have helped lower that cost. By “assessing staff by the value they add, measuring faculty by the qualitative learning they produce, and evaluating leaders by their budgetary effectiveness”, said Cochran, schools could easily reign-in spending rather than passing the cost of learning to students themselves:
Inside the academy presidents could take simple cost-cutting actions to reduce the bloated size of mid-management. They could apply the same concepts to reduce inefficiencies in the way faculty loads are determined. Add-on curricula could be streamlined; thereby, eliminating deadwood-courses taught by “retired-on-the-job” professors.
Similar changes must be made in big-time athletics. The most recent five-year study found only eight universities of the nation’s one hundred and twenty-five largest programs made a profit. The rest of the institutions drained millions of dollars from their university coffers.
Until Cochran’s colleagues take the initiative and make a move, students must grapple with the ever-increasing labor that comes with dragging the dead weight of a student loan behind them past the graduation stage.
Scarier than taking out those loans in the first place is the stark potential for default — something that most young adults shudder to hear.
“Although we’ve seen an overall improvement in delinquency rates since the Great Recession, the increasing trend in student-loan balances and delinquencies is concerning,” said Donghoon Lee, a research officer at the New York Fed, in an interview with Bloomberg Business in February. “Student-loan delinquencies and repayment problems appear to be reducing borrowers’ ability to form their own households.”
The Wall Street Journal has dubbed them “The Lost Generation”. After the 2010 recession struck, the highest casualties registered among young adults in their 20s and early 30s — those who likely attended college but were either unable to finish due to financial strains or received a diploma but zero job offers.
“The crippling recession … made it all but impossible for many young people to get a first foothold in the job market, and the achingly slow recovery … has left the prosperity of their parents’ generation out of reach — perhaps permanently,” wrote the paper in a September 2013 report. “Even those lucky enough to be employed are often struggling. Little more than half are working full time — compared with about 80% of the population at large — and 12% earn minimum wage or less. The median weekly wage for young workers has fallen more than 5% since 2007, after adjusting for inflation; for those 25 and older, wages have stayed roughly flat.”
Of course, there’s debate to be had over the current minimum wage and all the enormities that come with a plateaued payment system. But the real concern for many young people now is whether the pricetag is worth the effort at all.
“One thing I think about is, the majority of the time, the degrees you get aren’t always what you end up doing,” said University of Wisconsin, River Falls student Lauren Janssen, 20, in an interview with Cake & Poison in February. “It’s frustrating to go to college for something so specialized and it ends up being something you never use.”
That truth has hit many students particularly hard. Between taking a major that might reasonably offer them a fruitful career someday or choosing what they love and facing lasting, if not devastating debt from a loan they procured to achieve those dreams (and coupled with the cost of textbooks, which averages out to about $1,200 a year) the impact is becoming increasingly frustrating. No longer is college simply an unpaid invoice from the bank — it’s a frightening game of high stakes poker.
“It frustrates me a little bit, but there’s not much I can do about it so I just pay for it anyway,” said 23-year-old Chelsea Pipkin, a student at Brigham Young University, in an interview with Cake & Poison. But Pipkin and her fellow BYU peers have landed a better ticket in one sense: with an average tuition rate of around $5,000 per year, most attendees aren’t left with the same outrageous bill as so many others across the country.
“I have five older siblings and they’ve all assured me it’s not that bad,” explained Pipkin. “Also I’m going into Speech Pathology which is a really secure job with pretty good pay.”
Pipkin is one of the lucky ones.
“I’m worried about paying for school [and] I haven’t really discussed the costs with my parents,” admitted Wisconsin-based student Lauren Gengler, 18, a recent Bloomer High School graduate who sits on the opposite end of the crisis from Pipkin. “I don’t know if they will help me pay for it and if they do, I have no idea how much.”
Nervous about shouldering loans herself, Gengler explained that her options felt limited.
“If I have to pay for it myself, those loans are going to weigh me down until I’m like 40,” she worried. “If my family does help me, I’ll feel bad — it will be really appreciated, but they have two other kids and I don’t want them to spend all their money on me and my college education.”
The crushing dilemma under which the majority of the country’s students now find themselves quashed has taken its toll.
While public funding for universities is slashed by right-wing politicians looking for a quick fix and an automatic “Yes” vote from their loyal constituents, many schools have begun raising out of state tuition and are attempting to fashion campuses into an affluent affair meant solely to attract those whose parents can easily afford their education and more. As The Nation’s Michelle Goldberg pointed out in a May report, this sort of educational “gentrification” has put low-income and minority students at a severe disadvantage. Do they take the loans and risk a life in default, or pass by quietly and hope to obtain a job in the service industry? It’s a wholly skewed and degrading back-and-forth that more and more are refusing to play.
“I don’t think veterans should necessarily have to work two or three jobs just to be able to afford to live while we’re going to school,” said Kyle Blessinger, 28, in an interview with Goldberg. “I don’t have time to study. Some days, it’s quite tough.”
Blessinger, who is an Air Force vet working toward an MA in higher education in Arizona, has been working as a bartender and a freelance security guard, who, as Goldberg explains, often takes shifts at parties thrown by wealthy undergraduate students to pay both tuition and rent. His GI benefits, he explained, had been used up by the time he obtained his Bachelor’s degree.
Blessinger had been lobbying against government officials who were planning on cutting the state’s education funding by some $75 million (that later turned out to be a mere shadow of their eventual cut of $99 million), but his state representatives wanted nothing to do with him when he met with them one-on-one. In a meeting with conservative state Sen. Kelli Ward, Blessinger and his peers alleged that Ward had been “rude”, even resorting to name-calling.
“She called me an entitled little prick — I work three jobs, plus I go to graduate school. I’m not sure how much more biting the bullet she wants me to do,” lamented Blessinger.
Young adults are being confronted on all sides by a mismanaged and often corrupt system of lending, politics, and educational bureaucracy, compelling many to question whether a university degree is really worth the bruises. In an age where Millennials and Gen-Xers are throwing in the towel to make their own way in the world using creative strategies and all-out war against a lazy society that deigns to call them vain or entitled, it’s tempting. Of course, they are neither. But that doesn’t do much to comfort the ones still stuck in the crosshairs.
“What if I don’t get a job right out of college?” asked Gengler, worried. “What if only McDonald’s will take me?”
(Originally posted on Cake & Poison)