At What Cost?

The woeful irony of our crippling student debt is that through education we seek liberation from the shackles of ignorance, yet through paying for said liberation we become slaves once more. We trade pain for pain, and we do so willingly. We labor under the idea that all roads to success pass through the gates of academia, and when we discover that this is not always the case, we are left holding a very expensive piece of parchment. By any set of numbers one chooses, all costs associated with attending college or the university are quickly getting away from us. The keys to the gates of academia were never meant to be in the shape of the almighty dollar, yet here we are.

Take first the amount of student loan debt held by the average college graduate. As of October 2012, the average amount of student debt held by any given college graduate was $26,500. As a reference, in 1995 the amount was right about 50% of that amount. An average annual increase of 2.94% may not sound like much, but once it sinks in that this is year-over-year for nearly two decades, it becomes clear that there is a problem. If I may stray into the statistical side of the matter: there are an estimated 37 million Americans who have outstanding student loan debt, of which an estimated 5.4 million – 14% - have at least one student loan account past due. Outstanding student loan debt has either passed $1 trillion, or is knocking on the door, depending on which source one chooses. Regardless of the exact amount, the song remains the same - student loan debt is out of control. 37 million people hold $1 trillion dollars in one single form of debt. Student loan debt outpaces both credit card and auto debt and is second only to mortgages.[1] We want that education, and good on us for desiring to make a better live for ourselves, but at what cost?

If a college education is the path to the "good life," by what metric is this good life measured? Is the good life one in which the individual is shackled with debt that may take 10-, 20-, 30-years of more to pay off?[2] Everyone knows that due to interest rates, the longer one takes to pay off a debt, the more one ends up paying. For a $10,000 student loan at the normal 6.8% interest rate over a 120-month repayment period, one will end up repaying $13,809 – an increase just shy of 40% of the original loan.

A second factor that cannot be overlooked is the stratospheric rise in the cost of tuition. During the 1980-81 academic year, the average cost of tuition at a 4-year public institution was $6,381. Jump to the 2010-11 academic year, when the average tuition charged by a 4-year public institution was $15,605. This is a $9,224 increase over thirty years, or a $307.47 increase year-over-year for three decades. In percentage terms, the average tuition rate is 144.6% of what it was in the 1980-81 academic year. This is a 4.82% increase year-over-year for three decades. If these figures seem absurd in nature that is only because they are (it is by their truth that they are so).[3]

A third factor about which I wish to write but will not here dwell is the myriad periphery costs associated with paying for a college education. These are the non-financial, intangible costs that are dealt and felt on the individual level – the inability to find a job either because of a flooded job market or because one majored in a truly useless major (gender studies), the depression that comes with feeling helpless to one’s debts, the ever-increasing decision to settle with a job for which the job seeker is grossly over-qualified, which will only serve to cripple his future earning power by keeping him out of his preferred field… Describing these costs would require its own paper.[4]

Appalling, and yet we go in for this racket because we are told we must if we want to be "successful." This is neither the time nor the place to discuss what it means to be successful, but suffice it to write that success is not as formulaic as one is today led to believe. Public higher education is the golden calf we worship because we have made it into something it is not, and we are paying for our secular blasphemies in more ways than one.



[1] For more eye-opening statistics, please visit the following link: http://economix.blogs.nytimes.com/2012/11/27/student-loan-debt-rising-an...

[2] Borrowers age 30-39 carry $307 billion in student loans, followed by those under 30 at $292 billion, $154 billion in the 40-49 age group, 50-59 at $106 billion and the over 60 category carrying $43 billion, for a total outstanding debt of $902 billion. (http://libertystreeteconomics.newyorkfed.org/2012/03/grading-student-loa...)

[3] The tuition costs from this passage were gathered from: http://nces.ed.gov/fastfacts/display.asp?id=76 . The calculations are my own.

[4] The underemployment rate – a broader, more accurate measure of  joblessness – as of January 2013 resides at 14.4%.

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