Child Debt and the University

The U.S.  system of higher education is distinctive as the most expensive in the world, with a specific capacity to turn tens of millions of 18- and 19-year-old children into lifetime debtors.

America’s system of tertiary education (along with dysfunctional health care and financial systems) has been instrumental in transforming a free citizenry into an underclass of indentured servants.

The trillion dollars of education debt burdening America’s young people carries long-term implications that are simply terrifying.

Permanent debt and the hopelessness it brings are implicated in a range of social ills, from alcohol and drug abuse to suicide. The college debt burden is also speeding up national aging.

Even if the young college graduate today is able to find a job, most of their surplus income through their twenties, thirties and beyond will be transferred to banks, with the result that there will be little left to pay for raising a family.

Fertility rates have been declining since 2008 — if this trend continues or even accelerates, the demographic burdens for American society will reach a breaking point.

From the perspective of the individual student, American universities are not a very good value compared to their counterparts overseas. Unfortunately, language and institutional barriers prevent young Americans from easily outsourcing their education — unlike multinational corporations, who would happily dump these same college graduates in an instant.

If they could, many Americans would go abroad to get a decent education and gain entry into a better-functioning economy.

In Germany, for example, many universities are completely free.     

While the German university student pays almost nothing for his education, he will graduate debt-free and have a much greater chance of finding a job, because he lives in a heavily industrialized economy with only 7 percent unemployment.

The industrialized nations of East Asia have even lower rates of unemployment: 3.3 percent in South Korea, 2.1 percent in Singapore, 4.4 percent in Taiwan and 4.7 percent in supposedly “stagnant” Japan.

At 9 percent, U.S. unemployment is more severe given that so many are underemployed, and 7 million Americans are in prison.

The degeneration of U.S. higher education predates the 2008 crisis. University tuition and fees have been rising faster than inflation for several decades, even as incomes — including for the highly educated — have been falling.

Between 1999 and 2008, median household income for college graduates declined by $4,737, according to the Census Bureau. This was before the onset of the recession.
The American student today is being sliced up in a double pincer movement of rising university costs and declining income.

The problems of U.S. higher education in part emerge from America’s dysfunctional variety of capitalism. No individual participant in the higher education system is really to blame.

Nevertheless, it is disconcerting that those who benefit from child debt are generally silent about a system that is so manifestly unjust.

­— Edwin Way