Since we were young, we’ve been told that with hard work and determination in high school we would one day make it to college. Once there, if we succeeded with graduating, we’d get a degree which would lead to a well paying career that would allow us to invest in our future. With college debt now leading in the nation’s debt with the growing amount of 830 million dollars, we are stuck asking. Why is the college-loan system failing? The College Bubble was a term used to explain the effect of the nation’s current financial crisis and college tuition constantly on the rise.
That is was creating the bubble of debt that will eventually burst. College tuition rates have sky rocketed up 29% in the last 5 years. The average school year for a standard four year, for-profit college now costs $27,293 and on average only 2/3 students graduating due to not being to afford their college education. With the economy in a recession and lossing over 8 million jobs between the years of 07-09, graduates are struggling in the job market, as well as paying off their student loans.
(NIA) During the beginning of the recession, many induristes felt the collapsing of the economy. Induristes like the stock market, real estate and even oil! All induristes but two, healthcare and colleges. During this difficult time, colleges are prospering at student’s expense and graduates are not seeing the benefit. Only making the expenditure of college and the hard work of graduates, a poor investment. The government has tried to help students with government aid and programs for low-income graduates, but has failed to fix the problem.
College’s are charging to much for an education that even with government aid and loans, can not be affordable or paid off by a graduate in this struggling economy. College loan system is failing students due to a endeavoring economy, over college spending causing higher tuition rates, depleting wages and decling job market. College tuition and the loan system in place to fund it, must be modified to compensate in order to lower student debt. College tuition has obviously raised to unmanagable amounts for college students but why?
It is due to the college arm race. Colleges are currently spending huge amounts of money into their campuses and recectional actividies in order to encourage more students, which also means more money. Ohio University economics professor, Richard Vedder was quoted saying, “Every campus has [to have] its climbing wall, you cannot have a campus without a climbing wall”(5). In 2009 alone, colleges spent a total of 10. 7 billion dollars on contruction of new facilities like gyms and nicer dorms in an afford to recruit more students. (NIA).
Students will pay more money to attend a college that has a favorite college sports teams. When it comes to NCAA coaches, Brady and Jody stated statisticly the average salary for a NCAA football coach was is $1. 47 million in 2011. Which in the last six season was a climb up nearly 55% (2). If teams meet performance goals, coaches will, in addition, receive bonuses. Such expenses made by colleges for sport teams, maybe a leisure for a student but how does this help them with a better quality education or with their cribbling debt?
Students are paying for something that in no way betters their education, just the notarity of the college. College have found many ways to capitalize of their students in order to afford such expenditures. Some 4 year colleges require that you must be on campus for your first two years of attending with them. Room and board cost an average of $8,887 in the school year of 2011-12, that is up 4% since last year (College Board). It would make sense why they would require that you to stay on campus, if it only put more money into their pockets.
College books are another expense of students, colleges are benefitting from. Books are also required by college’s in order to attend classes and are not included in tuition. The cost of college books has tripled in the last 10 years, costing an average of $200 dollars (NIA). College’s will publish their own books, require students to buy them, then update or revise them every year to make the book obsolete causing students to have to by new one’s every year and making the resale of them, nonexistent! College’s will work with publishers and recieve kick backs for using books they publish.
Adminstation for college also feel the advantage of higher tuition rates. The president of Yale salary has tripled from $591,709 in 2000, to 1. 63 million in 2009. (5) With the average cost of graduating at a 4 year college at $27,293 a year, it is easy to see who is truly profitting from an attending and/or graduated student. Colleges are captializing of students in a poor economy and once out of college, their is no guarentee employment will be waiting. In 2008, American’s lost over 10. 4 trillion dollars in the financial crisis. Between 2008-2010 over 8. 3 millions of jobs were lost.
The government tried bailing out the country with a 4. 6 trillion dollars and was only able to recover 1. 1 million jobs, . 9% percent of jobs. That is 4 million dollars in cost for each job recovered (NIA). Boyce Watkins, a finance professor at Syracuse University is quoted saying, “[College] is certainly an investment. The question is whether or not you get your return on that investment in actual financial capital… [and] this blanket notion that going to college will guarantee you a better economic future is not always true”(3). In 2009, the numbers were at 12.
5 million umemployed, that is 8. 1 percent of the American population. The numbers have contuning to raise leaving the total count of unemployed at 17. 5 million. With unemployment at the highest its ever been in the last 25 years (6), it’s easy to see that even with the investment of college education, the job market is not in a state of stablity leaving the college graduate to take a minimal paying jobs, move trades, or move altogether to an area in which is hiring. All in which is at a cost to them. “Many people can’t afford to move, so they need jobs to come to them.
This is one of the least discussed, most challenging problems in the labor market right now… This is the largest annual jump in the number of unemployed since the U. S. Bureau of Labor Statistics began tabulationg this data just after World War 11. Most of the unemployed—62. 3 percent—are out of work because they lost their job, higher than any point since 1982″ quoted Heather Boushey, a senior economist at the liberal Center for American Progress (7). College graduates not only face the outragous cost of tuition but once finishing their degree they are stuck in a dead end job market.
With both college tuition and unemployment at record highs, it is not hard to see that why the college loan system is failing. What once was the american dream has now turned into american’s debt. With college spending to much on non-educational expenses and leaving their students to flip the bill in this economic downfall, its no wonder the college loan system is not helping the college graduate. The college loan system has to look to not only take into consideration the economy’s state but the own college’s spending.
While the nation is trying to recover and grow from the current recession it is important to recognize that student borrowing is working against our economic interests and the source of why that is happening. In order for the college graduate to pay of their debt, there must be employment after college and if that is not an guarenteed, college’s must reevaluate their expenditures. Until the economy recovers from its current crisis, student debt will only worsen and end up not only cost the american graduate but the nation as a total.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 29 September 2016
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