College Catastrophe: By Encouraging Government Student Loans, and Then Charging Higher Tuition, Colleges and Universities Have Not Only Created an Economic Bubble, They've Changed the Culture

Article excerpt

Last year, America's student loan sector swept past two important milestones in rapid succession, milestones with ominous portent. Sometime in the spring of 2011, the amount of total student loan debt surpassed the amount of total credit card debt for the first time ever. Toward the end of the year, total student loan debt appears to have breached the $1 trillion mark, prompting warnings of another asset bubble poised for a calamitous bursting.

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Overcharged or Underpaid?

The numbers associated with student debt tell a sobering tale. Since 1999, student loan debt, adjusted for inflation, has risen by more than 500 percent, while other forms of personal debt have increased by "only" about 100 percent. The average college graduate now carries more than $25,000 in debt, an obligation that often takes decades to pay off.

A large percentage of college graduates find themselves underemployed, often with jobs that they might have been able to find without the vaunted college degree. A few cases in point: According to data gleaned from the Bureau of Labor Statistics, 21.62 percent, or 482,784, of all customer service representatives have a college degree; alongside them are 13.4 percent of waiters and waitresses (317,759), 16.64 percent of secretaries and administrative assistants (559,571), 5.01 percent of janitors (107,457), and 5.09 percent of truck drivers (85,205). Hundreds of thousands of others with college degrees are tending bar, preparing food, manning concession booths, clerking at hotel desks, and performing a very wide range of important, useful, and perfectly dignified forms of work--work that pays too little to allow realistic repayment of gargantuan student loans, and for which a four--or five-year undergraduate degree is completely unnecessary.

The Great Recession has been driving such figures for years now, but Americans' appetite for the mythic college degree continues unabated, seemingly without concern for the cost. Will this state of affairs ever change, and what will be the outcome?

College educations have always been a time of frugality and penury. Historian Charles Homer Haskins, the distinguished Harvard historian who was America's first medievalist, in his path-breaking early study on medieval universities, The Rise of Universities, published several specimens of medieval students' letters home to their parents, in which the students complain about the difficulty of the courses and the inadequacy of their living conditions--and ask for more money to be sent! Little has changed over the centuries, except that nowadays, instead of studying canon law and Latin, typical college students can choose from menus of hundreds of different courses ranging from the hard sciences and mathematics to modern conceits like gender studies. And medieval universities like Oxford, Bologna, and the Sorbonne, whatever their other considerable inadequacies, did not impose punitive costs for tuition and other fees that kept their graduates in financial bondage for most of their productive years.

Until comparatively recently, college degrees, both graduate and undergraduate, were designed for a fairly elite slice of society that genuinely desired academic advancement beyond normal societal expectations and intended to become teachers, professors, researchers, and practitioners of a few exclusive professions like medicine, law, and engineering. A college education came with few frills other than the chance to learn at the feet of some of the world's elite minds, and was correspondingly priced so that most students could pay for their education by working summers and odd hours during the school year, or at most borrow from the bank a sum that could easily be repaid within a few years of graduation. Well do I remember a particular professor from my undergraduate years, who got his Ph.D. from the University of Pennsylvania, the Ivy League school founded by Ben Franklin, who told me that his tuition bill back in the early '50s was around 50 dollars per semester (roughly $450 in today's currency). …