The College Debt Meme Spreads
More and more has been written in the past two years about the college conundrum - it's economically important, but the debtload is a killer than can easily offset the benefits - and now the word has become a meme percolating through society. There comes a point where the talk finally, slowly, takes root even amongst those who've been amongst the status quo and in this case, it's the guidance counselors.
Eldest is a junior now immersed in the college search process, dutifully visiting a few schools that interest her and round-filing the hundreds of mailers and letters that come to the house. What she's noticing however, is that the guidance counselors at her school are actively talking to her peers and suggesting that perhaps the better option isn't just going off to college as their predecessors did. The new advice is to seriously consider what you want to do and then take the lower level general education courses at the local university/community college. This is a far cry from what I heard several decades ago - there's plenty of money out there and if you and your parents have to take some debt, it's easily repayable - and is driven by three principal factors:
- The cost of higher education is significantly than decades ago because the rate of inflation for college tuition is about twice that of standard inflation as measured by the CPI.
- Families no longer have the job/retirement security that they previously had, and the job market can't provide enough jobs that allow the graduate to both repay the debt and become economically independent.
- College debt is different from other forms of debt in that it can never be discharged in bankruptcy, but will follow the graduate until repayment or death.
This has now begun to dawn upon the educational establishment and they're finally passing the word along to the kids. It would be wonderful to see a Deus ex machina moment in which this reality is magically altered and the situation is simply fixed, but reality doesn't work that way. Real life works in fits and starts, veering one way and then another until a course is finally determined upon which allows progress to be made over time until a new equilibrium is reached. But one of the key elements is that when those within a system begin to quietly influence many small changes that cumulatively determine a larger outcome, and if the guidance counselors are actually pushing this, then I draw some comfort from that.
There is no magic answer to this situation as it's one has been developing for decades. We've hollowed out our economy via outsourcing. We've ignored the long term investments in pursuit of consumption and shortterm gratification, so there are no savings for the future. We've permitted the financial sector to usurp control of the economic and political process to the detriment of our society.
If you don't think that that's the case, ask yourself why it's perfectly legal - and considered a good business model - to toss easy credit to young people with no experience? Then ask why it's legal for this politically voiceless group to be the one group that is saddled with the most pernicious debt, debt that they can't escape but provides the lenders with a constant cash flow?
When the process is bought and paid for, then don't expect sudden miracles. But take comfort in the knowledge that slowly the word is spreading, now amongst the educational establishment.
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