The Student Debt Crisis — Is There a Solution?

Jakub Ferencik
Jan 10, 2018 · 5 min read

I have been thinking a lot about education. As a philosophy student I want to know whether or not it pays off. The only way it could pay off, is if it’s cheap, or if it gets you a job that is worth the financial debt and stress.

Why get into debt?

Getting into debt should be avoided. Here’s a handful of striking facts:

  1. Student Debt is on the rise, while wages are decreasing. Since 1999, student debt has increased by 500% while the average salary for young people has decreased by 10 percent since 2000.
  2. Sales across the board are decreasing because of Student Loans. According to One Wisconsin Institute, the overall impact of student loans translates into loss of $6 billion of automotive sales each year.
  3. The government is making money off of Student Loans, “The Congressional Budget Office projects that the Federal Government made about $50 BILLION on student loans in 2013. This is $5 billion more than Exxon Mobile, the most profitable company in the country.”
  4. The amount of people in the US with student loans is currently more than 200 countries of the world combined, including Canada and Australia (40 million people).

More fun facts about Student loans on the huffingtonpost.

Michael Robertson tweeted out:

“Nobody exploits the poor as much as Universities. They lure them with promises of lucrative job prospects using club-med style amenities to take on massive loans. The job prospects are often not there and the loans, unlike every other type of loan, they can never escape”

Consider the UK as an example, how much the average Vice Chancellor gets paid vs. highest paid Academic Staff and Regular Staff. The ratio is staggering. Times Higher Education has a timetable illustrating the problem.

Of the top 5 highest paid staff at universities in the UK, Chancellors get paid 400,000 GBP (Pounds)more than the highest paid professor. The question is why?

Is there something we can change with our education?

Student Debt Crisis tweeted out on September 13th, 2017 that the student debt crisis had reached $1,486,985,537,456.

It is the second largest personal debt among Americans.

mprnews.org

The Pressing Results of Student Debt:

  1. Second-largest personal debt among Americans.
  2. Leads to depression and anxiety.
  3. Prevents Americans & Canadians from buying houses/cars/ to start a family.
  4. Influences whether or not citizens go to university/college

Thomas Adam, professor of Transnational History at the University of Texas Arlington, wrote that the current student loan crisis is originally due to a social issue, not a financial or economic one.

He says that in 1910 students from upper class families started attending Colleges. This changed in 1927, when John D. Rockefeller began advocating for students to pay for their own education, since he believed it to be a personal affair.

So what Tomas Adam is suggesting is that we stuck with Rockefeller’s opinion that tuition is a “personal affair” and therefore needed to be payed for by yourself.

Education now, however, seems to be a public affair, one that is required by employers. Yet employment seems to be scarce, according to statistics.

Is Capitalism to Blame? Should we turn to the Redistribution of Wealth?

It’s not clear whether making the rich richer without making the poor poorer is actually having negative effects on society. Capitalism may have done more good than it has done bad. Peter Singer writes in his book on Effective Altruism (on generous living) that,

It would not be easy to demonstrate that capitalism has driven more people into extreme poverty than it has lifted out of it; indeed there are good grounds for thinking that the opposite is the case (50).

He continues:

It isn’t clear that making the rich richer without making the poor poorer has bad consequences, overall. . . . some of the world’s richest people, including Bill Gates and Warren Buffett, have done precisely that, becoming, in terms of the amount of money given, the greatest effective altruists in human history.

Maybe it’s not that easy to discern what exactly is to blame here. There is no doubt that there is corruption in the capitalist system. Maybe we could learn from Switzerland and other similar countries that do not permit their CEOs to earn a certain amount more than the average worker, especially not as is the case in the States where salaries have increased by 900% (according to some estimates).

The Solution?

Some have offered advice saying that we could exchange tuition for public services. This type of exchange might be most effective, since both parties are benefiting from it.

If millenials are getting more dependent on loans and hence more depressed due to increased levels of anxiety, it seems only necessary to slowly start finding alternatives.

“I believe that tuition-free education can only be realized if college education is again reframed as a public good. For this, students, communities, donors and politicians would have to enter into a new social contract that exchanges tuition-free education for public services.”

Read more on this at Salon.

“New census data from Statistics Canada suggests the quality of Canadian jobs continues to fall while precarious work continues to rise.

Most disturbingly, StatCan reports less than half of all Canadian workers (49.8%) between the ages of 25 and 54 worked full-time, full-year jobs in 2015.”

Read more here.

Is there some way to change this? Is there something we can do in the future in order to change this reality and provide more jobs? These are all questions that I’d love for us to discuss in the comment section.

Let’s make this a discussion. Let me know what you think and/or if you’ve read something relevant to the topic.

Before you go…

If you found this article helpful, click the

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keep reflecting.

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Jakub Ferencik

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Exploring Ethical Living | Not Pretentious | From Slovakia to Portsmouth to Oxford to Canada | Book Reviews on IG: jakubreads | Guitar vids on IG: jakublearns

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