Casting the First Stone at Student Loans

tuition hike

Death, taxes, and now, student loans.

It’s becoming rather evident that the student loan ‘crisis’ now represents a booming business for anyone banking on increased enrollment.  Private loan companies like the infamous Sallie Mae have reported annual growth to the tune of hundreds of millions of dollars in profit.  Just in 2012, Sallie Mae reported a 48% increase in PROFITS alone, mostly the result of all those late fees they send their pimps to collect from struggling students and families. They’re a section of the population that’s growing rapidly in society today.  Current estimates by the U.S. Department of Education are that 5.4 million borrowers are at least one payment behind on their student loans.

That begs the question- are these loans just too much to begin with, or is there a disconnect between graduation day and a student beginning their career in the working world?

We’re all to blame here, so let’s not look past that.  Parents and students are not doing as much due diligence these days in researching the loan process.  Government has adequately failed on many fronts to provide productive legislation to fix the problem.  Increases in tuition by the schools are burying students in deeper debt that they can’t comprehend until it’s too late.  And all the while, the economy fails to provide the kind of jobs that college students attend college in the hope of landing upon graduation.

Student-loan-debt-by-state

Northwest Indiana, however, provides some viable alternatives to attending one of the major universities downstate.  IU Northwest, Ivy Tech, Purdue Cal and PNC, Calumet College of St. Joseph, and even IUSB are very good options for those students looking to continue their education after high school without incurring the same amount of debt.  The common concern is a trade-off in the quality of the education itself, the reputation of the degree, and the individual attention given to the student at these community schools.  But those can all be combated with a dedicated attitude exhibited by the student and a good idea of a career path they hope to follow after graduation.

Unfortunately, these students are not nearly as prevalent as they are in larger institutions with those enormous tuition costs.  Schools like Purdue North Central, where admission is just as hard as tying your shoes, may sport a hearty acceptance rate and lower tuition, but the truth is they statistically only graduate 14% of their students. Here’s the report  That’s the 8th lowest graduation rate in the country among ‘public universities’.  That doesn’t do much to alleviate the concerns of students and parents as they try and decide the best route for the future after graduation.

But I digress…

Current consumer finance estimates have reported that nearly 1 trillion bucks in student loans are currently on the books for graduates, and with about 60% of American students choosing to take out loans to pay for their secondary education, that number is growing exponentially every year.  If you’re a student attending a public university in Indiana, you’re likely to have about $8,000 in student loan debt when you graduate, and that number doubles if you decide to mortgage your soul and go to a private school. One of the key questions remains is whether or not it’s worth your soul, credit score, and future happiness to throw down this kind of money these days.  But let he who is sinless cast the first stone, and students ought to just keep their hands in their pockets on this student loan issue.

american debt

I can’t help but examine whether or not the students themselves are a big contributing factor to the whole student loan situation.  College has become more of a rite of passage and escape from the home front for students these days.

Rather than attending for self-betterment and the cultivation of skills necessary for a specific career path, it serves as an escape from the world for 4 or 5 years where irresponsible decisions are more likely to occur daily than attending class. It seems pretty standard now to prolong the college experience as much as possible by taking the proverbial ‘victory lap’, or the extra year to enjoy the benefits of being a senior while ‘finishing up’ on a degree that you were a few credits short on.

Even worse, the ‘students’ in colleges now are not only less prepared for a career in the real world, but they have developed a sense of undeserved self-entitlement which carries over into their job search once they receive their diploma.

Coming from a background of enough privilege to attend a private institution, I can certainly understand that sense of pride in your college years.  However, what I have also come to witness is that pride acting as an catalyst to a sense of entitlement.

Kids are flocking to college in record numbers these days as a college degree is effectively the standard education level for most higher paying jobs with the potential for professional development (and the bigger paycheck which comes with it).  So even those who are ambitious and lucky enough to go out and compete for a job are not only overrun by the flocks of less-than-qualified graduates also seeking one, but now there’s reason to doubt that our crop of students is even deserving of work in the first place.

On July 1st, the rate on student loans backed by the federal government are set to double from 3.4% to 6.8%.  Qualms in Congress have impeded any effective response from the government in terms of fixing this growing situation.  Pretty much any student who took out one of the Stafford Loans are now getting a rough dose of reality now that the bills are rolling in.  Now the bills are going to keep rolling in as the interest on these loans compounds at double the rate, and the shrinking amount of jobs relative to those grads looking for them only compound the financial struggles.

As I stated before, everyone shares the blame in this situation, but it’s more important to also factor who gains the most profit.  Right now, it’s not the graduate whatsoever, but the first stone should be dropped on our own heads, because this is on us.

The younger generation entering the workforce should first make sure their education is taken seriously while its ongoing.  Not only will this ensure their preparation, particularly in comparison to their inadequate peers, but also foster respect and appreciation for the opportunity to even attend college.

Putting pressure on the government does no good unless the student is willing to first put pressure on themselves and accept responsibility for their education.  Only after that can we progress onto addressing the problems created by America’s next booming business: the student loan industry.

About Dave Wichlinski

Dave is a jack-of-all-trades (and a master of some), he is a Wabash College graduate and calls the Region home. Dave is a diehard Bears and Cubs fan and a recent Colts convert. He'll talk to you about sports, politics, philosophy, 2% milk and pogs. Dave doesn't exactly trust atoms, mainly because they make up everything. And don't bring up the White Sox, the Easter Bunny, or the fact that somehow the Fast and Furious movies are still making money. Dave used to be in a band called 'Missing Cat', you've probably seen one of their posters up on a lamp pole somewhere in the Region.

Posted on June 28, 2013, in Blog, News, Opinions, Politics, Uncategorized and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. 1 Comment.

  1. As someone who can strongly relate to this issue I can definitely see both sides of it. While I did take my education seriously while in school, I should have educated myself a lot more on the truth about student loans. I saw the statistics that showed how much more money I would make as a college graduate (this was pre-bubble burst mind you), and figured “what the hell, what’s a 100k when I’ll make that up 10-fold by getting this education.”

    While that may have been true at the time (perhaps less true now, though still not impossible), that wasn’t a legitimate reason to throw caution to the wind and go into the situation with my eyes closed as it were. I could have gotten a great education for a fraction of what I spent and I have only myself to blame for being saddled with this massive debt. I don’t regret my education (most of the time), but I would certainly have done some things differently in hindsight.