Kevin Drum has a blog post up which views the state of student loan debt with alarm and dismay, and I share his concern. He notes that it’s a generational thing, too:
It’s also yet another fault line between young and old that’s not likely to turn out well. My generation got a cheap college education when we were young, and we’re getting good retirement benefits now that we’re old.
Point of personal privilege, Mr. Drum. When I was a freshman at the (public) University of Arizona in 1968 full-time resident tuition was roughly $200 a semester. In 1979, after five-plus years out of school, I went to the (private) Hawai’i Pacific College in 1978-1979 to get the last 60 credits toward my Bachelor’s Degree and paid $900 a semester. I didn’t borrow a dime to pay that tuition (I had saved a fair bit of money while in the Navy and on Kwajalein during those five years). Neither at Arizona nor at Hawai’i Pacific did I ever pay more than about $80 for books in a semester.
I looked it up. Resident tuition at the U of A for the fall 2013 semester: $5,502. Tuition at what’s now Hawai’i Pacific University for fall 2013: $9,990.
There are a lot of reasons for that rise, I’m sure. In Arizona the state legislature has probably cut its support for state schools drastically in the intervening 45 years. Hawai’i Pacific has expanded its campus and its student body tremendously in 34 years, meaning it has expanded its faculty and staff correspondingly. I’m sure both schools have expanded their financial aid programs quite a bit. But for students who aren’t on good-sized scholarships, I see no way they don’t take on a large debt. That means each one has a millstone around his or her neck with (or without) the diploma. That debt has an impact on the entire economy. It reduces disposable income at the time of those students’ lives when they should be forming households, buying houses and white goods to fill them, and starting college funds for their children and retirement plans for themselves. If, instead, they’re writing a big check to a bank or to the Federal government to repay a student loan, none of that economid activity occurs. As Paul Krugman is fond of saying, “your income is my spending; my spending is your income.” Unless I’m a shareholder or executive of a bank, that’s not the case here.
It’s a mess, and it desperately needs to be addressed for the sake of all those college students. Remember, we’ve told them they have to have a degree to succeed in the new 21st century economy. They’ve listened and gotten themselves in a financial hole. Don’t we have a responsibility to help them out of it, even if it means writing down loans or reducing the interest rate on those loans to make them more manageable?
