Higher education used to be considered the pathway to success. It is becoming a road to a lifetime of indebtedness. Our nation is crippling itself with student loan debt.
The class of 2013 graduated owing an average of $35,000 - mostly student loans, but also credit cards and money owed to other lenders. That's just the principal. With interest the amount will balloon over years.
Forty percent of students who take out loans for college drop out before graduating. Their education gets them into debt, but not much else. On the other hand, students seeking graduate degrees must take on even more debt. New doctors graduating from medical school in 2012 owed an average of $170,000 - not counting interest.
College graduates today face an unemployment rate of nearly 9%. One third of graduates say they actually regret going to college. No one knows how many young people are choosing not to seek higher education because they don't think they can afford it.
Once again Congress has failed to solve a critical problem, although they have done a pretty good job for the banks and lending companies who lobby them. Interest on federally-guaranteed loans is about to double, from 3.4 percent to 6.8 percent. Who will benefit from that? In 2005 Congress passed a law making it impossible for most people to discharge student loans by bankruptcy. Wages and even Social Security can be garnished. Who benefits from that?
Aside from what we are doing to our youth, what are the consequences for America? By making it almost punitive to attend college we are jeopardizing the education of an entire generation of Americans. Where does this put our nation in global competition? France, Germany, Brazil, India and many other countries provide free higher education for their citizens. In addition to all the other things we import because we no longer make them, should we import college graduates too?
Student loan debt is a $1 trillion burden on our economy and growing. This is money that can't be spent for housing, consumer goods, or other productive purposes. It's 6 percent of our total GDP! With the U.S. struggling to emerge from recession, how can we afford this?
For the larger problem, a system that forces our youth to become indentured servants for decades in order to get an education, no one on the national level is proposing a solution. So it is likely to get worse. We are betraying a generation of young people, and cheating our nation's future.
Arno Vosk M.D.
Submitted by Virtual Newsroom