Listen to commencement speakers at college graduations this season and you’ll be inspired to scale mountains, discover cures, end hunger, invent a pollution-free energy source, and write The Great American Novel. In short, you’ll be pumped to chase dreams.
But why, oh why, hasn’t anyone challenged graduates to figure out a way to tackle the student-loan crisis?
Total U.S. student debt rose to a record-breaking $1.31 trillion in 2016, the 18th year in a row to make a new high at a time when other household debt has declined, according to a report by the Federal Reserve Bank of New York. What’s more, the amount grads owe after they toss their mortarboards into the air keeps inching up, and up, and up. More than two-thirds leave college owing money, to the tune of $37,172 on average. Most former students I know, however, owe a lot more, and that liability is both millstone and shackle.
This is a generation overwhelmed by debt — and not because they’re shopping at Zara and H&M, either. In fact, student loan debt is about $620 billion more than the total U.S. credit card debt, a fact I want to reiterate because I’m tired of watching my self-righteous peers wagging a collective finger at newly minted graduates. It also goes a long way in explaining why this younger generation can’t afford rent, can’t buy houses, and delays marriage and other “adulting” milestones.
College tuition and fees have increased fourfold in the past 50 years, rocketing past household income, the rate of inflation and the price of other goods and services.
I know it’s tempting to blame irresponsible parents who didn’t save enough for college or slacker millennials who want everything handed to them. Knee-jerk reactions make us feel oh-so-superior. They absolve us of responsibility and the necessity of digging deeper to find answers. Reality can be as unsettling as discovering your spouse changed the front door lock without telling you.
But here’s the truth: Higher education has grown out of reach for the average American family because college tuition and fees have increased fourfold in the past 50 years, rocketing past household income, the rate of inflation and the price of other goods and services. One University of Colorado professor estimated that if car prices had gone up as fast as tuition, the average new car would sell for more than $80,000. And while some higher ed institutions have stepped in — namely, affordable community colleges — the American ivory tower is tottering on a foundation of IOUs.
You won’t hear graduation speakers tell their audience this, of course. It defies the rags-to riches narrative, the work-hard-enough storyline we like to tell about ourselves as a society.
Just last week, the Trump administration released its budget proposal, which slashes initiatives that make college more affordable while also including major changes to the federal student loan program. There’s no argument that the student loan program needs streamlining, but continuing to shift the burden of paying for college to the people who can least afford it is ridiculous.
Government’s shrinking support of higher ed, though, is not the only cause of onerous student debt. Nose-bleed tuition hikes and unrealistic expectations share the blame too. Have you checked out some of the country-club amenities universities offer their students? The salary of star professors? The bloat of administrative positions? The lack of proper financial aid counseling? I know too many students whose debt burden far outstrips their annual salary, yet not a single one was told about this rule of thumb by a financial aid officer.
Maybe next year we’ll listen not to commencement speakers’ soaring rhetoric but to hard-nosed advisers giving real world recommendations to students enrolling in college. A degree, like so many other things in a free society, now requires skepticism, cost comparisons, and tough questions. Indeed, caveat emptor may be the first lesson learned in the hallowed but pricey halls of academia.