STUNNING REPORT ON STUDENT DEBT

Twentysomethings Come Home For Holidays Bearing Debt

As the father of a daughter who will be a college freshman next year, my primary concern as we go through the application process is that my daughter not graduate with the albatross of college costs hanging around her neck. Having myself graduated in 1976, I am flabbergasted with the costs of attending and graduating from college today. I had the foresight to begin putting college money away before my daughter was born, but costs have risen so irrationally and to my mind so unnecessarily that I realize that what I have put aside isn't enough, especially if she goes out of state, as she now wants to do.

As a natural born cynic, sometimes I wonder if this deplorable situation isn't at least in part deliberate. Contrary to the claims of boosters of the American way of life, and all the talk of freedom, it seems that what business and government want are slaves, and one way to accomplish this is to create a society that is so in debt that freedom isn't an option. It is simply absurd to put nearly 400 billion dollars into Iraq, with what we all (or some of us) can agree has provided no return to this country whatsoever, but put so little investment into education, higher or otherwise. And I'm not talking about teaching people to take useless standardized tests, which is the situation with K-12 today.

As it is now, it seems that the university is little more than a stovepipe of workerbees for industry. What happened to the liberal education? I remember some years ago when I was living in Laramie that the University of Wyoming proposed eliminating the Philosophy Department and merging it with the English Department. The proposal failed, but it seemed indicative of what has been happening in general. I've heard of similar attacks on the humanities in other colleges and universities. Surely, part of the point behind such attacks on the humanities is that an engrained habit of critical inquiry is not welcome in either industry or government. Witness the attacks on scientists whose research clearly point to anthropogenic climate change. But the onslaught on critical thinking is occuring in all sectors of (post) modern society. It's the new Dark Ages, it seems. This state of affairs is profoundly disturbing to me, as it already is to my perspicacious daughter.

Perhaps the newly elected Democratic Congress can rectify this situation, but I'm not holding my breath.

As a fairly recent college graduate I am certainly familiar with the problems of debt. However, I think that the problems go far beyond the familiar refrain of increased tuition costs. The major difficulty for me has been the fact that wages remain stagnant for most of the country and most of the professions that I know of. Then for people such as myself who decide to make non-profit environmenal work their vocation of choice, we find ourselves constantly slammed by the cost of living.

I am at the point that I am unsure if I will ever be able to make it into the middle-class (or whatever exists in its place), unless I decide to go out an work on a drill rig. Which unfortunately is becoming a more attractive option as every day passes.

Todd, this is a good topic to shine a light on; but, I believe that both of the comments above are hitting at a broader question. The much ballyhooed, at least by the GOP, American economy is not what it seems and the trends have not been good for several decades. The slide really began with Reagan and the "supply side" ideology that Reagan was hired to front. Since that time, the American socioeconomic pyramid has been under pressure to change shape and get taller and thinner with a broader and shallower base. The middle class has been squeezed to virtual extinction as the powers that be have tried to use every media tool that money could buy to whip up a frenzy for a genuinely shortsighted and incredibly selfish, predatory, and perverted form of capitalism. Those very few members of the old middle class who have been lucky enough to ride the squeeze upward have been far, far outnumbered by the overwhelming majority who have been extruded downward to join that vast, broad, shallow pool of cheap labor at the bottom of what was once the American dream. This process slowed a bit during the 1990s; but, the last six years have seen it accelerate again. What I find unfortunate is how few Americans can see the political connection and act on that recognition. After all, wasn't it our current president who greeted the audience at one of his fundraisers as his "favorite people, the haves and the have mores?" After that, just what did our recent college grads think the game was all about, at least for the GOP?

When I was a senior in high school in 1971, I worried far less about what school I got into and far more about what the number on the little lottery ball might be. Who will inflict that on this generation?

Today, a lot of college students have consumer debts while the attempt to hang onto the consumerism their parents taught them. Still, there's no doubt that we've seen a huge shift in the cost of education from taxes to private dollars. Rethinking college "core curricula", investing more in two year institutions, and even putting a surtax charge on excess credits over a certain number needed to graduate, and introducing competition into all levels of education are just a few of my suggestions.

Dutch go out and work that oil rig. It'll make a man out of ya. Once you've had to work that hard, and get that dirty, and risk life and limb, you will value money a little bit more for what it is, a measure of effort and time and thought. Those who are worker bees sure beat the heck out of those grasshoppers going though life singing "the world owe me a livin".

Watchin that oil rig I helped put together pull itself up and then putting it to work was quite satisfying. Muy macho, too!

As for philosophy and "oh, the humanities" it's a matter of supply and demand, isn't it? Listening to some chronic dope smoker praise the noble primitive isn't gonna prepare us to compete with a billion chinese. I think a "liberal education" can be found at most universities and especially in the political science departments.

If you're looking for a "classical education" it can be found in some of the most conservative private high schools in the country. I can't be found very often in public education, though.

Parents need to take time to teach students about credit. They can start by sitting down with their kids and going over their own credit card bill. Explain about finance charges, grace periods and minimum payments. Explain about rotating balances and how much extra you will pay each year in interest charges if you only pay the minimum payment.

It is also a good idea to show them a copy of your credit report and the effect of credit cards and other debt on their credit score and future financial options. They need to know that mistakes and bad decisions will not be forgiven by the issuer just because they didn't know better.


Good Rules for College Students Using Credit Cards.

* The most important ground rule for credit cards should be to only use them for emergencies, not for gas, food/groceries, or clothes. It is too easy to use the card for a quick meal or impulse
purchase without considering the premium a high interest rate will add. According to Nellie Mae, 71% of undergraduates use their credit card to buy school supplies, textbooks and food.

* Pay off the balance each month. 21% of undergraduates with credit cards reported that they pay off all cards each month; 44% say they make more than the minimum payment but generally carry forward a balance; 11% say they make less than the minimum required payment each month (Nellie Mae).

* Avoid department store credit cards, especially at a time when it will be easy to get a standard MasterCard, Visa or American Express. Although a discount to a favorite store sounds like a good idea, store cards have the highest rates available.
Use a credit card comparison website like Lowcards.com to find the lowest rates and terms for student credit cards.

* Avoid using credit cards for cash advances. The rates are extremely high.

* Get only one card and pay it off each month

* Know your credit limit and look at it each month. The credit limit may be as low as $500.

* Pay your bill a week before the date it is due. Default rates also apply to college students. One late payment or exceed the credit limit and the rate will jump to approximately 30%.

Jeff's point about the role of consumerism over the past couple generations is a very insightful one, as is Bill's advise on managing debt, but I believe there is one other element we are missing here - that is the neglect of many state legislatures to adequately fund higher education over the past twenty years. Public universities have been forced to raise tuition, as well as freeze hiring faculty, due in large part to many western state's failure to see the need of an educated populous in the modern post-industrial world. Employees may not need to be able to praise the noble monkey, but they do need to be able to think and communicate critically. Education is an investment, not only by individuals, but by society.

Yeah, I also made the point about the shift from tax to private dollars. The problem partly is the competition for tax dollars. I think K-12 has sucked the education dollar up, just as it lays claim to every property tax dollar it can possibly bully its way into. You could refer to the column about TIFDs and my response for an example. When they don't get what they demand, they sue. Those dollars they get come from the other entities supported by the general tax dollar, and a big part of that is Universities.

I'd propose a voucher for each college bound child with a "C+" average and above, and tighter entrance requirements for the flagship U's. Let the kids vote with their feet, and see if "university spending as pork" would give way to an efficient, consumer demand driven system. As it is now, the two big schools pay some of their tuition dollars to the smaller schools to keep them afloat.

The solution isn't more taxation, it's better priorities, and fewer uses of university dollars as pork.

A priority in state spending does seem to be at the heart of the funding debate. For example many western states have recently spent billions on highways. Granted they get some federal help on roads, but it would seem that shaving a few minutes off the morning commute should be a lower priority than making sure our universities and colleges are adequately funded.

I am not so sure on the voucher idea. At least on the grade requirement. I currently work in a stat which has a similar program, and grade inflation at the high school level has made incoming freshmen college classes ill-prepared. I am not opposed to the idea, it just needs to be tied to something else besides grades.