Everyone has heard the buzz about the looming cloud of student debt ready to rain all over our economy’s parade. From 2004 to 2012 student loan debt doubled for those in their mid 20s. A study conducted by the Federal Reserve estimates that 18 percent of borrowers owe between 25-50,000 dollars, while the rate of people with debts over 100,000 dollars continues to grow.
Student loan debts have led to a larger financial burden on the middle class in a time where over 20 percent of Americans can’t afford to buy a home. The main reason for this is the privatisation of the higher education system in America.
In a time when more and more public services are looking to private companies to sustain them (ie. Detroit’s selling of their water and sewage system), the higher education system has become the poster child (and warning) of the dangers of this policy. Though the mainstream media blames either the borrowers themselves or Obama’s “socialist agenda”, the real blame lies in the lack of public support, less money from the federal and local state government and how tuition money is being spent.
Schools across the country have began replacing full-time professors with part-timers to save money on health care costs, a provision of Obamacare that maintains all employees with over 30 hours must-receive health care. The president of New York University also stated that his school would save money by paying part-timers “one tenth” of what full-time professors make. But where has this money gone? When private lenders and banks are involved, one can only imagine.
The Bush administration is also largely to blame for the student debt problem. In 2005 they rewrote bankruptcy laws that created a one trillion dollar market for student loans, larger than the credit card market for banks. And, as though the situation weren’t already grim enough, graduates nowadays have a much harder time getting a job than graduates ten years ago. This means many college graduates still live at home and cannot afford to rent or buy homes of their own. This vicious cycle perpetuates the housing market crisis further.
Many recent studies have shown that jobs in the near future will not even require a university degree. With less people going to school or dropping out, this will also drive tuition prices up. Before the 2000s, higher education was considered a public asset, much like how utilities and roads are funded by the public (though that too is changing). But with the privatisation of education, and lenders preying on unemployed or underemployed young people who cannot afford to pay back their loans, the future seems dim.