Educational Indebtedness

For your grim reading of the day, you might take a look at this analysis in Inside Higher Ed of the Obama Administration’s recent release of the higher education data they’d assembled for their now-defunct college rating site. The bottom line is that more young people are in more debt than ever before without a great deal to show for it.

In some circles this is referred to as “being less materialistic”. In others it’s being a debt slave.

5 comments… add one
  • steve Link

    Wonder why it takes the government to generate a site like this where you can actually compare prices and outcomes? This was opposed, according to the article, on a bipartisan basis. Why? My guess is that politicians want to protect the schools in their own states, but you would think some free marketeers or some liberal do gooders would want this data out there for folks to see. Should have been done long time ago. Seems somewhat akin to the exchanges with the ACA where there was opposition even though it would actually create a real market where you could, for the first time, see prices and directly compare them. Almost as though no one really wants competition.

    Steve

  • TastyBits Link

    For anybody who has not been to an Open House sales event, it is worse than being on a used car lot. The professors, department heads, administrators, and groundskeepers will tell the parents and potential students anything to get asses into seats.

    When we went for my stepson, I was astounded, but maybe it was always like this. Since I always knew where I was going, I never bothered with the sales events, but back then, they did not have enough room to house all the students.

  • jan Link

    The Inside Higher Ed article posted by Dave is a continuation of what has been “grim” stats for some time, regarding the growing fiscal burden of college education tied to the dubious benefits afterwards of achieving such a costly degree. However this “revamped” site, in spitting out some stats, also leaves out others. The example given was limiting the earnings data to federally subsidized students which can skew the bottom line earnings by over or under stating it. Also, many colleges don’t report students “technically in default,” who drop out or graduate — again something that taints the real reality of paying back these highly inflated loans.

    However, one of the most tragic points made in this article was the following:

    The new data also show, according to the White House, that at 53 percent of all institutions of higher education, fewer than half of former students are earning more than the typical high school graduate.

    ???????????

    Dovetailing into this current dismal report is a George Mason Commentary, a few years back, assailing the Government’s role in education, by asserting it was actually the subsidized loans which drove up college tuition student debt to record levels.

    Federal student aid, whether in the form of grants or loans, is the main factor behind the runaway cost of higher education. As Cato Institute economist Neal McCluskey explained in an April 2012 article for U.S. World & News Report:

    “The basic problem is simple: Give everyone $100 to pay for higher education and colleges will raise their prices by $100, negating the value of the aid. And inflation-adjusted aid–most of it federal–has certainly gone up, ballooning from $4,602 per undergraduate in 1990-91 to $12,455 in 2010-11.”

    Thus begins a classic upward price spiral caused by government intervention: Subsidies raise prices, leading to higher subsidies, which raise prices even more. Yet this higher education bubble, like the housing bubble, will eventually pop. Meanwhile, large numbers of students will graduate with more debt than they would have in an unsubsidized market.

    Somehow government intervention always seems to have a way of eventually deepening costs, rather than reducing them. And, when this happens, it’s the average Joe who is punished, not the elite government bureaucrat who had the light bulb subsidy idea in the first place!

  • ... Link

    Based on the description this sounds like nothing new.

    Anyone want to bet that whoever the next set of presidential candidates win out we’ll hear nothing but talk of the need of more young people to go to college? Though I’ll grant that The Donald may pass on that buffoonery.

  • Guarneri Link

    I put my daughter on a plane to NC to immediately withdraw her application to Wake Forest. Upon her return I insist she complete her apps to Texas Permian and Louisiana State Ag and Mechanical.

    The value of education may stand as an interesting argument, but this “study” or compilation isn’t worth the paper it’s written on.

Leave a Comment