If private universities' financial plans are systematically putting most kids $30,000 or more in debt, then they are systematically accelerating the division of our society into a wealthy plutocracy and a debt-ridden labor class.
Let's get one thing straight. Compared to all the other problems in America and the world, I'm grateful to have the problem I have. I thank Allah, Brahman, Buddha, FSM, God, and the rest of the celestial pantheon that I have this wonderful problem.
I'm sure the well-meaning people who've dedicated their lives to higher education did not intend to become agents of economic oppression. But that's what's happening.
Here's it is, over the flip. (Biden 4.11.15 update below)
#2 son is graduating from High School this year. He's an intelligent, hard-working young man. He's valedictorian of his class, from a public high school that's rated #12 out of hundreds in our state, including the private schools. He has a 4.0 GPA. He scored 34 on his ACTs, which is in the top 1%. And he earned the “National AP Scholar” title when he was just a Junior. In case you've never heard of it, a National AP Scholar has scored 4 or better on 8 or more AP exams. Annually, roughly 3000 kids in the US earn that title as Juniors (3323 in 2014 (.xls)), out of a cohort of about 4.4 million. By these standards, this kid is easily in the top 1% of graduates this year. So he applied to various colleges, including several top private universities. We didn't figure that admission would be too much of a problem, and it wasn't. He didn't get into any of the super-elite Top 10 national universities, but we knew that was a stretch. He's a strong student, but he's not an Olympic gold medalist, which some members of the Class of 2015 are. Kids these days, right? He was waitlisted by two schools in the 11-20 range, and admitted by two schools in the 21-30 range. That kinda tells you where he is, and we're happy with that. As a backup, he also applied to our state land grant university, which is not in the top 100, but admission was virtually guaranteed. If you've done this before, then you know that along with the notification of admission or rejection, there's a financial plan. This is where the University tells you how much they expect you to pay, and this was where the wheels came off. You see, we are frugal people. We've never borrowed any money, except for the house, which we paid off. I've never paid a dime in interest on consumer credit. I've only driven used cars, and I've bought them all for cash. I paid off the credit card every month for 30 years. I don't own a TV, and don't pay a cable bill. I save a lot. Including money for the kid's college. Quite a bit of money for the kid's college. My mistake. Big mistake.
Give it to us. All of it. Then we can talk.
That's what these two places are telling us. Their offer is this ... nothing. Apparently saving money is a ticket straight to perdition, no matter what your income is, or how good your student is. The numbers get stuffed into some kind of cruncher, and the answer comes out,
By the time you are done, you will owe somebody $30,000 - $50,000
Excuse my french, Mr. Ranked 21-30, but fat fucking chance. I don't care what name is emblazoned on your gilded crest, you're selling an undergraduate degree from a college of Arts & Sciences, and I'm comparing your offer to your competitor's. Your cost of attendance for 4 years is $250,000. One of you is offering a slight discount, but both of you are wiping out our life savings, and putting us $30,000 - $50,000 in the hole. It's your fault, not mine, that you allowed your costs to escalate to such a ridiculous level. You have a problem with financial discipline, not me. Your competitor, our state school, is charging half as much, and offering significant merit scholarships to smart kids like my son. If he goes there, he gets to keep 100% of our savings, and graduate with no debt. Yes, there are differences between the universities, but are they worth $100,000? And worth carrying a huge load of debt into young adulthood? Not by my reckoning, which goes like this: We are not talking about the difference between getting a college education and not getting a college education. Everyone knows that getting a college education is a good investment, even if it puts you in the hole. If that were the choice, we would suck it up & borrow the money. But that's not the choice. The choice we are talking about is getting an undergraduate degree from one college of Arts & Sciences, versus another. Is a degree from a top college worth $100,000 more than the same degree from our State U.? Statistics say no.
It depends what you study, not where March 14, 2015 A new report from PayScale, a research firm, calculates the returns to a college degree. Its authors compare the career earnings of graduates with the present-day cost of a degree at their alma maters, net of financial aid. College is usually worth it, but not always, it transpires. And what you study matters far more than where you study it.
Which is what we knew all along. Five minutes after you're hired, nobody cares where you went to college, right? It's not where you went to school, it's what you're bringing to the party. Here's what's going on: Private universities are sorting students into two groups. The first group is rich kids, who can pay for it. They will graduate with no debt, and plenty of money left over, because they are rich, duh. If you've got 10 million in the bank, a $250,000 cost of attendance ain't going to slow you down one bit. The second group is the rest of us, which is most of us.
If private universities' financial plans are systematically putting the rest of us $30,000 or more in debt, then they are systematically accelerating the division of our society into a wealthy plutocracy and a debt-ridden labor class.
Yes, they are instruments of social mobility, but they are not instruments of upward mobility. For the kids who wind up $30,000 or more in debt, they are instruments of downward mobility. Colleges are adding to inequality, not lessening it. I'm sure the well-meaning people who've dedicated their lives to higher education did not intend to become agents of economic oppression. But that's what's happening. Systematically.
Average Student Loan Debt Approaches $30,000 About 70 percent of 2013 graduates left college with an average of $28,400 in debt. Nov. 13, 2014 The average amount of student loan debt again crept up for the Class of 2013, and is approaching $30,000, according to a new report from the Institute for College Access and Success. In its ninth annual report on student loan debt, TICAS found nearly 7 in 10 graduating seniors in 2013 – 69 percent – left school with an average of $28,400 in student loan debt, an increase of 2 percent from 2012.
Seventy percent of 2013 graduates left college with an average debt of $30,000? They are tomorrow's debt-ridden wage slaves, starting today. The other 30% are the rich kids, the nearly-rich kids who can graduate without debt, the kids who win entirely-too-rare scholarships, and people like us, who refuse to take on so much debt. Are we really doing this to our kids? Why the fuck are we doing this to our kids? For my son and me, it's a letdown. It looks like super-smart, super-hard working, valedictorian #2 son is not going to get to go to Mr. Ranked 21-30 elite private university. But not because he doesn't belong there, intellectually. He most certainly does. He worked hard. He earned it. But so much for your meritocracy, eh? He won't get to go because these places have turned into instruments for promoting the plutocracy, and impoverishing the rest of us. And we ain't playing their game.
I am not opposed to all wars. I'm opposed to dumb wars. – Barack Obama
I am not opposed to all student loans. But I am opposed to dumb ones. If the choice is between getting a solid college eduction versus none at all, and it makes sense to do it, then by all means, go to college. But if the choice is between borrowing 10's of thousands versus graduating debt-free, with money in the bank, from a less prestigious university, I'd prefer to save the money, thanks. Sorry guys, you lost out on a really smart kid.
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UPDATE: Filling in for President Obama, Vice President Biden delivered the weekly address, on the President's proposal to make community college free for all qualifying students.
Transcript ... by the end of the decade, two out of three of all jobs will require an education beyond high school, from an 18-week certificate to a two-year associate’s degree to a four-year bachelor’s, or a PhD ... but today, the cost of higher education is too high for too many Americans. Too many folks are priced out of a piece of the middle-class dream ... that’s why the President and I have a straightforward plan to remove that barrier and expand the pathway to the middle class—by bringing the cost of community colleges down—down to zero. How would you pay for it, Joe? Here’s what we propose: Close loopholes for the wealthiest investors and levy a .07% fee on the biggest banks to discourage the kind of risky behavior that crashed our economy just a few years ago ... It’s simple folks, two years of community college should become as free and as universal as high school is today if we’re to make this economic resurgence permanent and well into the 21st Century.
YouTube Video
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Linkfest
Student Loans are Worsening Inequality, with Thomas Piketty One statistic which I give in my book which is a bit frightening is that if you look at the average income of the parents of Harvard University undergraduate students right now, what you get is the equivalent of the average income of the top 2% of the US distribution of family incomes. So this doesn't mean that there is nobody from below the top 2% that gets into Harvard, but this means something very precise, which is that the people from below the top 2 that make it to Harvard are sufficiently few, and the people that come from the top 2 are sufficiently high, within the top 2, that the overall average is as if all students had been picked from within the top 2% of the distribution of US family income. So this is an example which shows that you have the official discourse about meritocracy, equal opportunity, and mobility, and then you have the reality ... there is a lot of hypocrisy about meritocracy in every country, not only in the US, but there is evidence suggesting this has become particularly extreme in the United States ...
Colleges are full of it: Behind the three-decade scheme to raise tuition, bankrupt generations, and hypnotize the media by Thomas Frank What I mean to say is that the tuition price spiral is part of the larger history of inequality ... As the rewards that can potentially be won by members of the white-collar class have [increased], it feels natural that the entrance fee for membership in that class should have escalated in a corresponding manner ... Finding ourselves on the receiving end of inequality is a fate we will pay virtually any price to avoid, and our system of higher ed exists to set and extract that price.
You Can Blame Student Debt for America's Inequality and Shrinking Middle Class There is a tendency among elite opinion makers to believe that debt accrued while gaining a college degree is "good debt" that isn't problematic because, as the thought goes, those with college degrees tend to make enough money to recoup their debt over a lifetime ... In fact, this is only true for some students -- those who were fairly wealthy in the first place.
Inequality, student debt and millennials This analysis draws a picture of an economy where the bulk of the benefits of the economic recovery have been going to those who already have the most wealth. For millennials who aren't lucky enough to be at the top, educational debt seems to be emerging as the largest obstacle to creating wealth. If policymakers wish to address inequality among this generation, it seems that they have no choice but to address their student debt burdens as well.
Is Student Debt Contributing to Wealth Inequality? The student loan crisis isn’t just hurting young graduates, it may be contributing to the overall rise in wealth inequality as well. The math is pretty simple: wealthy students who can afford to go to college without taking on loans can immediately begin investing their money and saving for retirement as soon as they enter the workforce. Their less well-off peers, however, spend these years paying off their considerable debts, thus expanding the gap that existed at the beginning.
Our View: Student debt load fuels income inequality THE SYSTEM IS RIGGED. Higher education is supposed to be a great leveler, but it’s becoming another way the divide between the rich and everyone else in America grows. Graduates saddled with debt don’t have the same opportunities as their debt-free peers — not because of a lack of hard work or talent, but because the system is rigged against them.
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