The Student Loan Crisis

Bernie Sanders has recently risen to the top of the news with his proposal to have the federal government forgive the entire $1.6 trillion dollars in student loans currently owed. Given that the U.S. economy is over $20 trillion, that’s almost 10% of the economy tied up in student loans, most of it owned and thus directly owed to the federal government or its corporations.

Over a third of Americans have at least a Bachelor’s degree, and over half of high school graduates will attend college. The average tuition, fees, and dorms for a year of college at a state college is over $20,000. That’s over $80,000 if you finish in 4 years. In 1970 it would have been less than $9000 per year (adjusted for inflation), and at the time only 16% of the population had college degrees.

In 1940 and 1950, 6% of the population had college degrees. Clearly, this would have been pretty much doctors and nurses, lawyers, university professors, and other professionals. Many business people didn’t have college degrees, and there was no such thing as majoring in business, let alone getting a Master’s of Business Administration. Today, many people go to college to get training they ought to be able to get by working. Instead, they are paying colleges to give them this training rather than gaining it through experience and on-the-job training.