From his editorial in the New York Times:
Young men and women are leaving college with debt loads that would break the back of a mule. Families in many cases are taking out second mortgages, loading up credit cards and raiding 401(k)s to supplement the students’ first wave of debt, the ubiquitous college loan.
At the same time, many thousands of well-qualified young men and women are being shut out of college, denied the benefits and satisfactions of higher education, because they can’t meet the ever-escalating costs.
You want a recipe for making the U.S. less competitive over the next few decades? This is it.
Tamara Draut, in her book, “Strapped: Why America’s 20- and 30-Somethings Can’t Get Ahead,” tells us:
“Back in the 1970s, before college became essential to securing a middle-class lifestyle, our government did a great job of helping students pay for school. Students from modest economic backgrounds received almost free tuition through Pell grants, and middle-class households could still afford to pay for their kids’ college.”
Since then, tuition at public and private universities has soared while government support for higher education, other than student loan programs, has diminished.
This is a wonderful example of extreme stupidity. America will pony up a trillion or two for a president who goes to war on a whim, but can’t find the money to adequately educate its young. History has shown that these kinds of destructive trade-offs are early clues to a society in decline.
I just read the book Strapped that Bob Herbert referred to in his column. I recommend it.
The kids who graduate with enormous debt burdens — $40,000, $80,000, $100,000 or more — face a range of uncomfortable and even debilitating consequences, the first of which is the persistent anxiety over how their loans are to be repaid.
My student loan debt from law school was $100,000. And it is not dischargeable in bankruptcy. That is part of the reason why I care so much about debt issues.
Bob Herbert goes on to say:
I’ve spoken recently with a number of law students who have already decided to go into corporate practice because their first choice — public interest law — would not pay enough to cover their loans. Many students have turned their backs on teaching for the same reason.
Back when I first started practicing law, Legal Aid was down to paying $6.00 per hour for a full-time attorney position. I interviewed for a position with Legal Aid. They ended up hiring an attorney with 10 years of experience in Family Law, the area they were looking for. Now, admittedly, some of that was due to the oversupply of attorneys in the market. Things are not so bad now as the starting salary for an attorney working at Legal Aid is $30,000 per year, and that is comparable to what you would make in private practice or working for the state.
Another thing to keep in mind is that it is not so easy to get a corporate job. Many corporations only seek job applicants that graduated in the top 25% (or higher) of their law school class, so the competition is fierce.
Bob Herbert goes on to write:
At that stage of life, you shouldn’t have to choose between a job you would love and one that you would take simply because it would pay the bills. Talk about stepping on a dream.
There are also plenty of cases of students who have postponed marriage or buying a home or having children because of their college loan obligations.
And then there are those who never see a graduation day. There’s no way of telling what talents have been squandered, or what great benefits to society have been lost, because bright students who were unable to afford the costs have been forced to leave college, or never went to college at all.
In a nation as rich as ours, it should be easy to pay for college. For some reason, we find it easier to pay for wars.
One of the old rules of success we were taught growing up is that you should obey the law, get an education, work hard and you will become successful. What we are now finding out is that because of the debt load that is being foisted on up-and-coming talented young people, they are having to give up opportunities. They are being bankrupted. What is worse, the very debt that is bankrupting them is not dischargeable in bankruptcy proceedings. We are now finding out that you can apply all of those old rules, but it is not a guarantee of success anymore.
Mr. Herbert is completely right; but the situation is even more dire than what he paints in his column. Our current policies -- and it is not just a few of them -- are destroying the very opportunities that America is supposed to stand for. Social mobility has historically been one of the hallmarks of American civilization. Recent studies, however, have shown that the U.S. and Britain have the lowest social mobility in the industrialized West.
Even Warren Buffett is sounding the alarms:
The unease at the way the system benefits the well-off is captured by the decision of 120 billionaires, including Warren Buffet, America's [now second] richest man, to found a pressure group to oppose the elimination of taxes on capital gains and inherited wealth. Buffet's argument is that the US is developing an aristocracy of the wealthy. Just as it would be absurd to select the US Olympics team for 2020 from the children of the winners of the Olympics in 2000, he says, so it is wrong to construct a society whose likely leaders tomorrow - given the advantages that wealth confers - will be the children of today's wealthy. This offends not merely the values of democracy and equality of opportunity on which the US is constructed, but will be economically disastrous.
Social mobility is central to our values as Americans. It is important that we reverse course and restore access to education and job training so that we can go back to being the country we were meant to be.