Thursday, August 18, 2011
College "student aid" package = crushing burden of debt
As students receive the letter saying "Congratulations, you've been admitted to" the college, university or graduate school of their choice, there's usually another package of materials labeled "Financial Aid." In times long passed this may have meant a scholarship or fellowship offering all most of the cost of tuition and, perhaps, even a stipend for living expenses. In sane, well-managed, egalitarian nations of the world, often this is still true. Societies of that kind understand that supporting talented young people in their quest for knowledge and preparation for meaningful work is a public good of great importance. But in the U.S.A. ....?
During the past 30 years, what is fraudulently labeled "your student aid package" has actually become "your crushing burden of long term debt." Under the neoliberal (free market conservative) policy approach, students are defined as "customers" and "consumers" whose ability to purchase goods and services is a matter of ability to pay, or more likely, to borrow and borrow and borrow.
Now the results are in. A story in the Wall Street Journal reports that the crushing burden of student debt in America now exceeds money owed on credit cards. "Student loans outstanding today — both federal and private — total some $829.785 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com." Credit card debt amounts to a mere $826.5 billion.
Young people and their anxious families used to assume that the debt load was well worth it because there would always be challenging high paid jobs issued with one's cap and gown. Alas, that is no longer true. When university brochures talk about their "outstanding graduates," they may be referring to the amount of money the poor souls owe.
Is student debt America's next financial "bubble"? If so, when will it pop?