A whopping two-thirds of American college students graduate school already deeply in debt. But the decision to go into debt to pay for a college degree is a $1.2 trillion crisis that’s crippling the economy.
According to The Institute for College Access and Success (TICAS) Project on Student Debt, the average borrower will graduate with $26,600 in student loan debt. That means, that before a dollar is made using the degree, most Americans will owe money to someone else. The trend is not doing the economy any favors either. One in 10 graduates will accumulate more than $40,000 in debt and 1% of graduates will accumulate over $100,000 in student loan debt.
According to the Consumer Financial Protection Bureau, student loan debt has reached a new milestone, crossing the $1.2 trillion mark — $1 trillion of that in federal student loan debt in 2013. That debt currently stands at a whopping $1.5 trillion. And according to a report by Forbes, this is a negative sum game for both the borrowers and the economy. Although taking out massive amounts of debt for college is now the new normal, it’s crippling the economy and the personal financial situations of millions of borrowers.
However, the Pittsburg Post-Gazette says there isn’t a student loan crisis in a recent op-ed. But this information is coming from those who profit off of student loans, such as college presidents. But others say that this is simply a matter of supply and demand and there is more demand than supply. Additional options should be presented to those who have become intent on debt rather than a mandated degree. Educating students on the power of debt should also be considered to help stave off and eventually eliminate this problem.
“There has been a big shift in terms of who should bear the burden of the cost of education,” said Benjamin Keys, a Wharton real estate professor with a specialty in household finance and debt. “We know the stories of our parents, that they could earn enough working as a lifeguard in the summer to pay for a semester of college. The growth of tuition costs relative to teen wages — indeed, all wages — has veered sharply upwards.”
“We’ve come to a place where most students have to borrow in order to pay the cost of completing a bachelor’s degree,” said University of Pennsylvania professor Laura W. Perna, executive director of Penn’s Alliance for Higher Education and Democracy.
Of course, that’s little consolation to those who cannot pay for the degree they went into debt to finance. The student loan dynamic is without a doubt changing the culture of the country. People no longer view debt as something they need to avoid to eliminate slavery to the lender, but something as “necessary” to get ahead. Perhaps this is also why people cannot imagine their life without enslavement to the government. They have been conditioned to believe this is “normal.”
I wish I could be sympathetic, but 90% of college students HAVE NO BUSINESS GOING THERE as they don not have the maturity to study, the knowledge and education to continue in the higher education to POSITIVE educational gains, and have no intention or idea that they will have to repay the loans to START WITH, as college is nothing more than a paid vacation and party in their eyes. They select useless degrees and have no work ethic.
Yeah, I don’t feel the slightest sympathy for them. F*k them. Adult decisions have adult consequences.. they need to grow the F*K up and THINK before they act stupidly.
Why do I have to keep explaining this to you? It is the DISQUS system that filters comments. We have no control over it.
….Burn…..
REAL TIME COMMUNICATION VERBOTTEN. Shadow banning. Delay. Censorship. Situation normal here.
No problem.
I don’t allow frustration in my life:
– – No Starbucks. They prefer muslim illegals and bums to hang around their business.
– – No NFL. 2 years. I STAND FOR OUR NATIONS ANTHEM. I refuse to support knee takers.
– – No hollywood movie tickets bought in 7 years. They are communist. I HATE COMMUNISM, TYRANTS, Censorship. Piss on them ALL.
ALL the above offended and annoyed their PAYING customer base. Me. My friends. My family. So we ALL avoid the above business’s.
Your site chooses to use this “Disqus” product. It is a choice. Your choice. Own it.
Free Speech Verbotten on web. Just be good netizens and do as Siri, FaceMook, Google, and Alexa dictate. Stop speaking and resisting your tech mafia kings.
Wooden spoons should be banned. So should tornadoes. They should be banned. Right along with free speech. Just vote leftist and you will be taken to camps. Problem solved. Just like China. Embrace your leftist corrupt tech kings. Go to your FEMA reeducation camps quitely. Everything is normal here. Move along.
SBD, welcome and I agree totally. Those kids are toast and won’t know it til’ it’s too late.
College in the year 2019 is one big waste of time & money. About 90% of the degrees aren’t worth a shit. Even if you study a branch of engineering, no guarantee for a job after graduation. The corporations still keep bringing the Chinese & Pakis over here on 1HB visas for whole a whole cheaper than hiring a domestic engineering school graduate. Don’t look for it to end under the Trump Administration. By the way, same thing is happening in the medical fields, too. My advice, stay healthy & out of hospitals! Just remember, it was never like this when I was growing up in the 1950’s.
I managed to pay off my student loan while raising 3 kids, After I became a widow.I don’t feel in least sorry for them.
The $1.2 Trillion College Debt Crisis Is CRIPPLING The Economy
It is only crippling if you pay it.
60% of debt borrowers are not paying it. And why should they? The Democrats are promising debt forgiveness and free college.
John the title of this article is just wrong. It is not the debt that is the crisis, it is the simple fact the debt has been used to pay for worthlessness. It’s like buying a hammer made of porcelain or soft clay. Or a pair of pliers with wax for the hinge pin. First time you go to use such an idiotic tool, it’d break. It has no purpose. It’s useless. The debt has fueled the rise of zero value. Negative value actually. For to correct it, not only the loss of the original investment; more, the additional hassle loss of recognizing and having to undo the mess and retraining these snowflakes. It’s always harder to undo a knot than tie one.
then the debt would be toooooooooo big to fail
and
we, the tax payers, would be on the hook to bail the whole program out
grrrrrrrrrrrrr
Umm you have no choice in the matter. Your taxes will bee used to bail out the program. Whats the difference between now or 2years or 20? You still will not have a choice, your taxes….. WILL NE USED.
Prices for anything from gold to education to healthcare to housing will rise to whatever the market will bear in relation to how many people want to buy it.
The more it can bear, the amount most people can afford to pay for it, the higher the prices will be.
Grants, scholarships, student loans, etc, make higher prices more affordable for the consumer (at least at the time they want it) and have resulted in ever increasing educational costs.
Get rid of these cost mitigating factors and you will see a drop in the price of college, the same way you would with automobiles if there were no tax credits (for some models) or financing available.
Learn to read and write.
I graduated with a STEM degree from a rather expensive private school. I also qualified for a two year technical degree.
I had no student debt what so ever.
Combination of Vietnam era GI bill and employer tuition
reimbursement paid for my education.
Yes, I worked full time while earning a degree.
Virtually every aerospace company has a tuition reimbursement program. One company would even pay you wages for graduate degrees eg masters and phD, for selected fields, while you went to school full time.
Most companies, including the US military, will bend over backwards to accommodate your school schedule.
Years ago there was a Seattle Seahawks player, Dan Dornik who was in UW Medical school.
It can be done, you just have to be patient.
Eisenkreut? 🙂
Pickled hobbit cabbage? What?
STEM is just a general term. What field was your expensive STEM degree in?
JRS,
This is a little more personal than I like, but
I earned a BS degree in computer science, so
that makes me a scientist.
A very boring degree and you’d better be up on
your mathematics.
This STEM degree allowed me to make a living
as a real time Software engineer and and later
on as an Electronics engineer.
My technical education was in Avionics electronics.
I can design it, program it, and fix it.
Happy?
Sure. Thanks for the reply Doc.
Don’t know where you get this crap from but CRIPPLING…… yea far from it pal !!!
It depends on what part of the economy is being crippled. The FIRE industry used to be about 5% of the economy. It is now about 50%. So, they are not being crippled…they are constantly expanding. The goods producing part is shrinking as more and more financialization eats up everything. The parasites are killing the producers.
But this is to be expected in a debt based monetary system. All money is loaned into existence and compound usury is added to the loan. To pay back principle plus interest requires constant expansion of the debt. Compound interest is an exponential function. It becomes a hockey stick graph.
Growth is just a nice name for debt expansion. The debt must continue to grow or the system crashes. The bankers don’t care who has the debt. They only care that it keeps being created to support their usury income.
They are adults who got worthless degrees and now don’t want to sacrifice to repay the loan. So those of us who did get reimbursed for the loans we repaid? Because that would be fair. What do we do with all those ‘students’ who dpent their loan money on cars, vacations, and mobile homes? Should taxpayers also forgive those loans?
To become a physician, the average debt $166,750 while a third saw a cut in pay. But this is largely if the doc can attend a state school. Since there are an inadequate number of med schools, they have to go elsewhere or be wait-listed. That out-of-state cost is $250,000 to $500,000.
The process is four years at a university doing pre-med of some kind, often a BS in science. Two years of basic science then two years of clinical rotations in med school. Then a minimum of three years as a resident in a field of study for family practice or in internal medicind. That period can stretch to 5-7 years. As a resident, the doc works 80-120 hours a week for $57,200. Do the math. At best, that is $14 per hour which is equal to $7 an hour in 1990 pay.
How many people are willing to do this to age 29-32? Not many as they can make far more…and in a far less demanding way and without taking such burdensome loans.
Wait, that doesn’t include taking loans just to start a practice with rent and equipment and malpractice.
By 2025, we will be short at least 90,000 because of these deterrents. Inflation has severely cut real wages, malpractce has soared, and Obamacare has severely cut reimbursement versus costs increasing.
What some med students do is really expensive buut there is a reason. They first become pharmacists which takes four years of college and four years of grad school to get a pharm D. Then they go to med school, but try to cram in part-time work as a pharmacist while attending med school. They can technically do that but this leaves very little time to study the brutal course work. This is almost not worth it as it’s very hard to do this during residency with some kinds of programs (it’s even something that will get you in trouble). So that adds a significant cost to the price but should the student wash out of med school (5-10%) or fail to match a residency, then the student can work as a pharmacist.
The average cost of a pharm D is 100,000.
If the government bailed out the college loans it would have a huge impact on the economy. These young kids would have money to burn, buy a house, make investments…it would be bigger than all the OBO bailouts and would help the “middle class” vs the top 1%.
Bailing out current college loans would have the effect of never forcing any student to ever pay for college ever again. Just get a loan, do as much college as you want, and then have the loan forgiven. That will be unaffordable for the taxpayer. And who will police where the loan money is being spent (to avoid having that college loan money spent on a nice vacation somewhere)?
Same can be said if the government forgave anyone who had a mortgage, car loan or medical debt! I mean if they are going to bail someone out why not those who work for a living? Do you see where your logic fails now?
Wow, not only are drug prices sky high but paying for the schooling to dispense them legally is ludicrous. When healthcare became so unaffordably expensive then we have had no real healthcare. Existing condition patients go away, bring us you scrapes, bruises and pill relieving bellyaches.
Now in many countries, there are limits on malpractice, the mad school education is a fraction of the cost, but the final pay is lower too. Very few people today want to enter obstetrics because you basically are asking to be sued. Pediatrics has always paid the least and is also a field where you are likely to be sued. Anyone becoming a psychiatrist knows they can’t help those patients (which is depressing) so it’s managing their meds and risking being sued.
Would you do this job knowing the cost now? Most won’t and salaries are likely to decline even more due to an entire generation of socialists.Few docs will recommend their children follow their footsteps. You can all but guarantee a divorce as most spouses will not tolerate it.
Don’t know where you are getting your info. from, but it’s closer to $1.6 trillion…..not $1.2 trillion, but what’s a couple of extra millions at this stage of the game.
I went to a really good college here in SC. My last semester of tuition was $600.00 ( 1982) . I went to the inflation calculator and saw that the tuition based on inflation should be have of what it is now . Why has the tuition risen so high ? Because as with anything when the money is flowing…people spend,spend,spend.
Colleges build new building,new admin. offices you name it. Because they can always go up on tuition and the student have no choice but to pay it.
We need to teach kids that there’s no shame in being a mechanic, a plumber etc. Heck I have a friend who is a Mercedes mechanic. A damn good one….he makes 6 figures every year .
These milennial kids spend $11 on avocado toast. That’s why they can’t pay off the loans.
Someone has to pay the price of those coaches
This is so unfair. I too suffer from crippling student loan debt. I started playing a game called Givling. It is crowd funded where they pay up to 50000.00 in student loans. It’s free to join and play. I am hoping to win at some point soon. To join this amazing app, all you have to do is download #givlingcode. Use the invite code DC162235.