By Jackson Parker | USA
With the rate of jobs growth increasing around the country, people scramble to equip themselves and their kin to find a job that can support them and their families. The most stressed option to prepare for future employment is, of course, college education. While a degree can provide students with appropriate skills and opportunities for succeeding in the real world, the sword has two sides. The opposing edge ends up becoming the vast amount student debt accumulated with going to school. This debt gained from going to college has skyrocketed since 1980 and caused the millennial generation to be burdened with intense debts rivaling the cost of a mortgage.
With this sharp increase in the prices associated with schooling, many questions come to mind for people who are on the fence about attending college.
- Why are prices so much higher than when my parents were in college?
- Why am I being pressured into paying this much money?
- Who made these prices higher?
These questions are valid and great concerns among today’s current youth and need to be addressed and fixed accordingly. The problems with the current university system and the prices associated come from Big Brother himself. The government has wrenched its hands into the world of postsecondary education in the name of “fairness” and “equality” and has caused a travesty to the current generation of students attempting to afford college.
The federal government has provided a “low-interest student loan service” that has been the main cause of the increased cost of tuition across the nation. This federal service was implemented in order to guarantee low-interest rates and prevent loan discrimination because of bad credit among other things. These federal loans were implemented with positive intentions to help the lower class but, after many years, have proven to hurt them the most.
The problem with these loans is seen when you compare them to traditional loans for a house or other valuable item. When you apply for a loan, the bank or other lending services will evaluate you for their own risk/reward in the deal. The company will check your previous purchases, current qualifications, and adjust your interest rate accordingly to make sure they aren’t taking an economic risk without incentive for them.
The government’s student loans do not follow this plan; they give out as much money as needed, at a set interest rate, to any qualified applicant. Most people would champion this as a positive thing, helping poor or otherwise unfortunate people who need help going to college. This plan overlooks the biggest problem that the government has created. Without incorporating their risk into the lending, the government loses money to defaulting loans without proper interest to make the risk worth it. Since government lending agencies do not discriminate against obvious risks by raising their interest rates, they are saying “everyone is equally opportune for college education.” While this egalitarian statement seems to be for the best, it simply isn’t true, individuals have varying levels of uncertainty to their successes.
While more and more people enter postsecondary education, the value of a college degree inflates while the cost associated with this pursuit skyrockets. All the while, the taxpayer shoulders the risk for these student’s education without knowing anything other than the fact that they are attending college. As majors and past credit history are completely disregarded in the current system, the student debt soars over one trillion dollars and the number of defaulters push over seven million. Many people believe the narrative spread by organizations, such as the NY Times, that college is required for a successful life and you should attend without proper qualifications on the government’s “free” money. But this claim that you must attend college is false, many professions require no college degree whatsoever. Some of them are even in a few of the upper tax brackets and provide for a whole family unassisted.
Many people have observed the inflation that has happened inside of the United States, increasing the price of goods. While inflation has happened within the country, the rate of tuition cost increases outdo the numbers inflation contributes. The CPI (Consumer Price Index), the value tracking inflation, has increased 120% over the past 30 years, while college tuition cost has soared 260% in the same time.
The government has been handing out loans to fill the colleges with as many people as possible. These state-run colleges like UT and NYU are run by the government and still require funding. Instead of the government causing an uproar by increasing the property tax on a state level, their solution was a seemingly righteous endeavor that was masked in the shade of “egalitarianism.” By supplying every student who wishes to attend college and strapping them with student loans, these state-run colleges can gain revenue through tuition and other onsite services while keeping out of the local government’s tax plan. However, that does not mean the society isn’t paying for these students to attend school, the money goes straight to the federal budget deficit.
While the government struggles to afford the trillions of growing costs of sending whoever wishes to attend college, they choose to ignore the possible solutions. Other than completely eliminating the lending service to prevent losing further amounts of money, there are other ways we can mitigate the impact of these debts. Evidence has shown that certain majors, especially in arts and humanities, are far more likely to default on their student loan debt. By increasing the incentive for the government to give loans to majors with historically higher default rates, the government can soften the blow of each defaulter. The system will remain a “fair” method to provide loans as intended, but correlated to majors based on independent research in order to mitigate the national student loan debt. For example, business majors typically have the least amount of risk associated with them and therefore should be held at a lower interest rate.
The government needs to put a plan into action soon in order to combat the downward spiral of the increase of student loan debt and cost of tuition across America. By doing nothing, the taxpayers are accepting defeat and masochistically increasing their own debt in the name of “fairness for all.” The student loan debt crisis can be solved with various simple actions all with one goal in common, preventing the government from acting like a seemingly benevolent god. The government has exercised too much power far too many areas of the country, including the education and futures of its own citizens as well as taking control away from the private institutions who are willing to give loans to worthy candidates. By making the government function like a business instead of a charity, or by completely removing it from the equation and letting private industry take care of the people, the massive inflation of the cost of student loans will meet or possibly stoop below the rate of inflation. With this in mind, as a taxpayer and as an American, we all must band together in order to ensure a bright future for our posterity and avoid the malicious cost associated with seemingly righteous governments.