As though life isn’t already hard enough on students financially, now the government is making a massive profit on our struggle to become educated, well-rounded citizens.
Not only is the federal government forecast to make a profit off student loans this year, that profit will be larger than that of any of the country’s biggest companies (like Apple and Exxon Mobil, for example).
The Department of Education has made roughly $120 billion from student debt in the past five years.
This isn’t fun to read, especially with rates for government-subsidized Stafford loans set to double in July, to 6.8 percent.
Our country’s shift to a neoliberal capitalist ideology—which led to the financial burden of higher education—moving from the state to the individual, receiving a higher education is more expensive now than ever.
In 1973, the price of tuition for one year at an in-state public institution averaged $2,175 using today’s dollar value. Fourteen years later that number rose, only slightly, to $2,700. From 1987 to 2012, that number skyrocketed to $33,300.
Though the increase in education costs began exceeding the rate of inflation in 1975, the difference has grown more rapidly in the past two decades. In 2003, for instance, the cost of higher education increased 14 percent in one year alone.
The rising cost of education wouldn’t be such an issue if the economic growth of the country were proceeding at a similar rate. From 1982 to 2008, education costs increased 439 percent, while household income increased only 147 percent.
What we’ve created is a group of roughly 37 million students with loans averaging between $24,000 and $35,200 each (the average was $9,200 in 1993). With our current economy, this debt will hinder them for decades, delaying important life choices such as marrying, having children, buying a house or car and so forth. College graduates simply aren’t interested in accruing more debt after college.
Because student loan debt is unlike many other types of debt in that it cannot be cleared by bankruptcy, you’re truly stuck with it until it’s paid off.
This is rather interesting: You can’t escape the loan payments, regardless of the death of a breadwinner or loss of a job, yet our government leaders still plan on setting interest rates up to nearly 7 percent.
Interest rates are supposed to protect lenders from the risk of people not making their payments; if there is no risk, why are there interest rates, and why are they so high?
Also, in order to make it easier and more appealing to buy a house, our government allows individuals to write off the interest on their mortgage payments from their taxes. While those who earn less than $75,000 a year can write off student loan interest payments, paying off student debt can be perilous if you attended a private university or attended grad school, even if you make more than $75,000 a year.
Our government should be doing everything it can to help people get a higher education—at least for its own sake. Fostering the educational growth of a nation will unquestionably lead to long-term and large-scale benefits for the U.S. The better we educate our citizens, the more our country will progress and prosper.
This isn’t limited to economics, either. An educated population can do wonders culturally and help us to make progress in science, medicine, environmentalism and many other areas. By making education more accessible, we can perhaps create a generation that will fix the problems we currently find ourselves in.
The way it stands, we’re giving the impression that receiving a higher education means committing financial suicide. Sure, you’ll get a degree, but good luck finding a job that pays enough to afford it.
Essentially, we’ve transformed college degrees into white elephants.
When other developed nations, such as Germany, can make attending a university affordable, it baffles me how much the U.S. hinders its young adults and future leaders. I’m beginning to think the White House wants us all to be ignorant and distracted—maybe we’ll ignore the disheartening state of affairs if we aren’t educated enough to understand.