I graduated from a third rate state college in 1964 with a bachelors in psychology. While I wasn't on a fast track to fame and fortune, I did have a ticket to a guaranteed job. A couple of years later I went to graduate school and got a masters in social work. That guaranteed me a better job. I didn't have to acquire any student loan debt along the way. All that was supposed to be a built in feature of the great American dream. Get an education and you'll get ahead.
In the intervening 40 years since then, things have changed a whole bunch!
A college degree once all but guaranteed a well-paying job and higher earnings than high school graduates. But fewer of these good jobs are now available because of both long-term economic changes and the lingering effects of the Great Recession.
In 1970, only 2% of firefighters had college degrees; now 18% do, according to Richard Vedder, an economist at Ohio University. Fewer than 1% of taxi drivers had a college degree in 1970; now 15% do. About 25% of retail sales clerks have college degrees, Vedder said.
As more college graduates have flooded the market, employers are able to offer lower wages. The earnings of college grads have fallen about 13% in the last decade, according to Drexel University economist Paul Harrington.The US job market gets tighter and tighter. While the great recession accelerated the process, these are trends that have been going on for a long time. A lot of what used to be considered decent middle class jobs have been eliminated by such forces as automation and outsourcing. The shift towards a knowledge economy creates some jobs for people with specialized training and skills but the supply of such people greatly exceeds the number of available jobs. US college graduates are more and more competing in a global job market. Meanwhile the cost of getting the education that might get you a job continues to climb much faster than the rate of inflation.
Young people coming of age are faced with a Hobson's choice. If they skip college they have a high likelihood of being doomed to low paying service jobs. The good middle class union blue collar jobs have almost vanished. They can go to college. Unless they come from a family with considerable financial means, that will likely mean student loans. From the above data it is apparent that they can still wind up in the low paying service jobs. The difference is that student loans are not dischargable in bankruptcy. For people who are making just enough to live on, that can create a millstone for many years to come.
There is no sign of a magic bullet on the horizon that will suddenly solve this problem. It is not just a matter of changing some laws and economic policies, though that would be a help. We are moving into a world where the reality of expectations are fundamentally different than what most of us have know through out our lives.