The issue of growing student loan debt was one of the many pet causes adopted by the Occupy Movement last year, and it’s been thrust into the forefront once again this last week as President Obama has been visiting college campuses across America campaigning to stop a proposed increase in the interest rate on student loans.
However, the debate continues to be an important one. As the cost of college continues to rise, student loan debts are also increasing and, with the economy still in recovery, the unemployment rate among recent graduates is very high. More and more voices are raising important questions about a college educations and its necessity in the modern economy.
Rising Costs Staggering
Wednesday saw the staging of protests around the country for 1T Day, meant to mark the day that student loan debt in the United States passed the $1 trillion mark. This means, among other things, that student load debt now exceeds that of that of credit card debt. Interest rates have been at 3.4 percent since 2007′s College Cost Reduction and Access Act slashed it to that rate, but it’s due to double back to 6.8 percent without action from congress. The average levels of student debt for American college graduates approach $13,000, but the top 1 percent of borrowers owe more than $150,000. President Obama has tried to make this issue personal on the stump.
“I didn’t just read about this. I didn’t just get some talking points about this. I didn’t just get a policy briefing on this,” Obama said. “We didn’t come from wealthy families. When we graduated from college and law school, we had a mountain of debt. When we married, we got poor together.”
What’s more, paying back this staggering pile of debt is harder now than it’s never been. A recent Rutgers University study found that, in a simply random sample of recent graduates from four-year universities, only 53 percent held full-time jobs. What’s more, with jobs scarce, many graduates are forced into service jobs that don’t fit the expensive qualifications they’ve just spent four or more years acquiring.
This last July, the Obama administration unveiled new regulations on benchmarks for job placement that for-profit colleges would have to reach before students could receive federal aid. Essentially, unless college could prove that their students were getting jobs, they wouldn’t enjoy the benefits of the Federal Government helping students pay for tuition.
“These new regulations will help ensure that students at these schools are getting what they pay for: solid preparation for a good job,” Secretary of Education Arne Duncan said.
However, the question as to why these standards are applied to for-profit educators and not all universities are becoming more and more pressing. If college graduates still can’t find work and have tens of thousands of dollars in debt, it’s hard to make the case that a college education is so important to America’s youth that the Federal Government should keep footing the bill.
However, the need to get a college education in the current economy is as pressing as it’s ever been. As manufacturing jobs dry up or move overseas, the highest-paying jobs left are more and more in the service sector and require higher education. While recent college graduates are seriously struggling in today’s job market, those without degrees are in even more trouble. According to the Bureau of Labor Statistics, the median income for a high school graduate in the United States was $32,552. A four-year degree, however, improves that to $53,300. With a Masters that improves to $65,364 a year, and a professional degree reaches $79,508. What’s more, the unemployment rate may be high for new college graduates, but it’s even worse among comparable age groups without degrees.
President Obama voiced this concern in reiterating the importance of a college education during a stump speech in Iowa. Responding to critics who argued that the student loan question would distract from the economy, he said: “These guys don’t get it. This is the economy. This is about your job security, this is about your future. If you do well, the economy does well. This is abut the economy. You are the economy. If you’ve got schools, if you’ve got talents, if you’re starting a business and companies are locating here in Iowa because they have a well trained workforce – that’s the economy. That’s how we’re going to compete: making sure our next generation earns the best education possible is exactly America’s business.”