Wednesday, September 7, 2016

Apples and Oranges

In 1970, a kid could go to college and pay for it with a part-time job.  Averaging perhaps 15 hours a week at minimum wage would pay the costs.  They'd have to work maybe 800 hours over the year to cover average tuition and fees. They could do that in a summer. 

Today, a kid graduates from high school and faces a price tag of $13,200 per year for college.  That's the average for state run institutions.  At minimum wage, that's 35+ hours per week for the year, and it doesn't include food and lodging.  They've got a choice at that point.  They can join the workforce and plan on low wages for a lifetime, or they can get the money from somewhere else.  Families are less able to fund advanced education than they were in the 70's.  Wages haven't increased at all for the middle class, but college costs are up 600%+.  And, student loans are great business for the lenders.

In 2010, student loan debt surpassed all credit card debt, and by 2011 student debt exceeded auto loans. 
By 2014, U.S. student loan debt had risen above $1.2 trillion, with over 7 million debtors in default.

Anthropologist David Graeber, "If there’s a way of a society committing mass suicide, what better way than to take all the youngest, most energetic, creative, joyous people in your society and saddle them with, like $50,000 of debt so they have to be slaves?"  Beyond that burden on recent graduates, the impact is worse on those who don't complete their degree.  With similar indebtedness and less earning potential, they'll spend years in bondage, perhaps decades.

It's apples and oranges, and it's not the kids' fault.  There is no similarity between 1970 and today.  You've got to have advanced education if you want to make a reasonable income. We're crippling our young people by the choices they have to make.  Economic inequality and stifling debt, it's what we've done to them.  

Parents, plan accordingly.  And aggressively.
And yes, it is time for change.

For lower income households, the increase is higher.

This is one of several key elements of modern economic inequality, persistent poverty, and the widening GAP between the elite and everyone else.  So did college costs go up because loans became available?  States reduced their funding for education as the students picked up the cost  So why would we reduce the funding for advanced education?  Are there conflicting priorities?

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