...... meet Cortney Munna, a 26-year-old graduate of New York University recently reported by The New York Times to have nearly $100,000 in student loan debt, debt that her degree in religious and women's studies did not equip her with the actual job skills to repay. Payments on Cortney's debt are about $700 per month, equivalent to a respectable house payment and a major bite on her monthly income of $2,300 as a photographer's assistant earning an hourly wage. And unlike a bad mortgage on an underwater house, Cortney can't simply walk away from her student loans, which cannot be expunged in bankruptcy. She's stuck in a financial trap, and she's not alone.
"Even students who major in programs shown to increase earnings, like engineering, face limits on how much debt that can sanely amass. And with costs approaching $60,000 a year for many private schools and $30,000 for state schools, six-figure student loan debt is fast becoming the norm.
"Now, for many, the debt is enough to quash marriage plans. Who wants to marry someone with huge amounts of unpayable debt? It's enough to prevent home ownership and generally wreak havoc on the debtors' lives. In fact, total student loan debt in America has passed the trillion-dollar mark -- more than total credit card debt and more than total auto loan debt. But as prices have been going up, learning seems to have been going down. A recent book, "Academically Adrift" by Richard Arum and Josipa Roksa, found that 45 percent of students did not demonstrate any significant improvement in learning during the first two years of college, and 36 percent of students did not demonstrate any significant improvement in learning over four years of college.
The primary reason, according to the study, is that courses aren't very rigorous. In fact, a recent survey of more than 700 schools by the American Council of Trustees and Alumni found that many have virtually no requirements. Perhaps that's why students are studying 50 percent less than they were a couple of decades ago. And all of this is happening even as millions of people with college educations can't find jobs. Today, many graduates are already jumping the tracks to become skilled manual laborers -- plumbers, electricians and the like. The Bureau of Labor Statistics predicts that seven of the 10 fastest growing jobs in the next decade will be based on on-the-job training rather than higher education. And they'll be hands-on jobs that are hard to outsource to foreigners. If you want your toilet fixed, it can't be done by somebody in Bangalore. People pursuing these careers will have greater job security in today's economy and will be free from the crushing debt amassed by their more educated peers....
Too many schools are acting like predatory lenders to unsophisticated borrowers. Meanwhile the administrators and faculty in some cases are living like the one percent on the backs of these onerous student loans. We need to quit subsidizing this predatory lending and push schools to offer more value for less money. They need to become more efficient or they are going to have a collapse as large as the housing bubble.
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