President Obama doled out the most shocking stream of commencement cliches to the graduating class of Barnard College Monday. To offer just a taste:
“The question is not whether things will get better—they always do… The question is whether together, we can muster the will—in our own lives, in our common institutions, in our politics—to bring about the changes we need. I’m convinced your generation possesses that will.”
Whatever else they possess, the class of 2012 possesses an enormous amount of debt. Heavy borrowing’s not only for graduate students or drop outs from for-profit colleges any more. It’s also for Barnard alums. Forty eight per cent of those graduating this year from Barnard (where the price tag of an education stands at $58,078 ) have taken out loans to pay for their bachelor’s degree. As the New York Times recently pointed out, “Nationally, ninety-four percent of students who earn a bachelor’s degree borrow to pay for higher education—up from 45 percent in 1993.” For these students things aren’t getting better, they’re getting worse. Their will has nothing to do with it.
Standing at $1 trillion and rising fast, outstanding student debt is a bubble set to burst. The New York Times report compiled shocking numbers: “For all borrowers, the average debt in 2011 was $23,300, with 10 percent owing more than $54,000 and 3 percent more than $100,000.” Not just the students but also their parents are borrowing. Loans to parents for the college education of children have jumped 75 percent since 2005-2006.
Just like that first home, millions spent on marketing have made a college education seem like an American must-have. Yet ever since the early 1980s, college tuition has risen faster than wages, and public education spending’s been cut back. As the Times reports: “If the trends continue through 2016, the average cost of a public college will have more than doubled in just 15 years,” even as this year, “state and local spending per college student, adjusted for inflation, reached a 25-year low.”
If you liked the mortgage crisis, you’re going to love the education debacle. College admissions officers, like mortgage loan officers, tend to urge borrowers not to worry about the costs. Students have always defaulted. The federal government’s pre-approved the bail-out. Today, nearly one in ten students default within two years—about twice what it was five years back.