As the costs to attend colleges and universities continue to rise, college students, as a whole, have declined further into debt. Many students compensate for rising university costs by taking out massive amounts of loans.
Loans are obviously not the answer, but there are very few alternatives available to students to assist their needs; parents’ money can only stretch so far. We are told that a college education is necessary to find employment in today’s economy. However, it seems colleges and universities utilize this widely recognized statement as a justification to hike prices every year.
According to The New York Times article published this past September, the total student debt in the United States has climbed to an exorbitant $1 trillion.
“Nearly one in every six borrowers with a (loan) balance is in default. The amount of defaulted loans — $76 billion — is greater than the yearly tuition bill for all students at public, two- and four-year colleges and universities.”
According to statisticbrain.com, the average cost of tuition at a four-year university was $22,092, as of the 2010-2011 academic year. Just 10 years prior, in the 2000-2001 academic year, an average four-year university potentially only cost a student $12,922. That is almost $10,000 less than the current norm; no wonder the number of students taking out loans has skyrocketed.
My first thought about rising tuition costs at colleges was that inflation was the direct cause. However this may not be true at all.
According to an article published by Bloomberg, “The public-college increase outstripped inflation of about two percent or less during the period when administrators made their decisions (on tuition costs).”
As terrible as that sounds, this statistic is an improvement from the almost 5 percent difference between college tuition rates and rising inflation rates.
Another major reason debt for college students continues to rise is the difficulty of finding a job straight out of college. Some students will end up deferring loans until they make enough money to repay them, which may never happen.
Last year, the Economic Policy Institute released an article titled “The Class of 2012: Labor Market for Young Graduates Remains Grim.” It stated that unemployment rates among young workers below the age of 25 is double the average for potential employees older than 25. Without a job, some student loans will just build interest over time, making them almost impossible to pay off in a lifetime.
This past week, an article in the Huffington Post announced that liberal arts college Spring Arbor University attempted to fix the student debt problem in a very questionable way. Its plan states that if a student who graduates from their university and does not receive steady employment, they will assist in loan payment for that graduate. This plan has definite strengths but also has some major drawbacks.
For one thing, this would not be fair to the students who did not have to take out loans or found steady employment and received no aid. In addition, the university would be showing students that taking the easy way out would actually end up furthering their agenda, making it so that they do not need to take responsibility for their loans.
I agree students should be held accountable for the loans they take out. However, the rising costs of tuition have caused students to take out larger loans, making it harder for them to pay back their debts in a job market that is completely unforgiving. I think it may be time for universities to lower the cost of a college education.
If colleges truly cared about the well-being of their graduates, they would take lowering costs into consideration. Do they really want more than 50 percent of their students leaving with a negative dollar sign hanging over their heads?