EMAIL SIGN UP!
Most Popular This Week
- Corporate Win: Supreme Court Says Monsanto Has 'Control Over Product of Life'
- How the US Turned Three Pacifists into Violent Terrorists
- Cornel West: Obama 'Is a War Criminal'
- In 'March Toward Disaster,' World Hits 400 PPM Milestone
- Revealed: How US State Department 'Twists Arms' on Monsanto's Behalf
Popular content
Today's Top News
Beware The 'Student Debt Bomb', says New Report
The amount of student borrowing crossed the $100 billion threshold for the first time in 2010 and total outstanding loans exceeded $1 trillion for the first time in 2011, according to a new report.
The report titled, The Student Loan "Debt Bomb": America's Next Mortgage-Style Economic Crisis? (pdf), was published the National Association of Consumer Bankruptcy Attorneys (NACBA), and paints a frightening economic picture of the world created by skyrocketing tuitions and high interest rates in a job market that continues to offer few jobs to graduates.
"How big is the danger to the US economy?" the report asks. Most worrisome to those on the ground during the 'mortgage crisis' that sent the world economy into a tailspin in 2008, is that the atmosphere and metrics around the student debt crisis feels much the same.
"As with the mortgage foreclosure crisis, the staggering amounts owed on student loans also will have repercussions for the broader economy," reads the report. "Just as the housing bubble created a mortgage debt “overhang” that absorbs the income of consumers and renders them unable to afford to engage in the consumer spending that sustains a growing economy, so too are student loans beginning to have the same effect, which will be a drag on the economy for the foreseeable future." And continues:
Most Americans see a college degree as the single most important factor for financial success and a place in the middle class. Post-secondary education and training have become essential not only to the individuals hoping to enter or remain in the middle class, but to the nation as a whole. It is widely believed that we need a well-educated workforce to create new opportunities in the United State and to remain competitive internationally.
But, as family incomes, available grant aid, and state investments in higher education have failed to keep pace with college costs, students and families increasingly are turning to student loans to help bridge the college affordability gap. [...]Americans now owe more on student loans than on credit cards, according to the Federal Reserve Bank of New York, the U.S. Department of Education and others. And, because there are fewer people with student loans than there are credit card holders, the debt burden on the individual borrower is considerably higher.
And Jon Christian, writing at Campus Progress, notes:
Part of the problem, according to the report, is that students are taking on increasing debt for degrees that are not particularly lucrative. And any number of traumatic events can results in students missing a payment, according to the researchers, which sets students up to spiral from delinquency to default.
Students aren't the only demographic caught up in the crisis, according to the report: Parents who took on debt for their children, many of them near retirement age, are going to suffer as well.
The Collegians' Stephen Keheler reports on student efforts to fight back against the rising burden of student debt:
[Earlier this week], thousands of students converged on the Capitol lawn in Sacramento to protest tuition raises and demand that state representatives increase funding for schools. They also protested the growing levels of student debt.
“That was one of our demands—complete forgiveness of student loans,” Asami, who was one of the leaders, said. “I have friends that are getting their bachelor’s degree now and they have 30 to 50 thousand dollars of student loans, so they are scared. They don’t know how they are going to pay and so they just keep deferring payments.”
A borrower can defer payments, but interest keeps building up and the debt just gets higher. Student debt has grown from 3 percent in 2000 to 7.5 percent in 2012. This means that recently graduating students aren’t able to buy big-ticket items that would help the general economy to recover.
“I can’t get a new car anytime soon and mine is not running very well now,” said Thompson.
Furthermore, graduates with a massive debt burden find themselves forced to narrow their job-search options. Many do not take entry-level positions in their fields of study because the pay would be too low to service their debts.
The protests in Sacramento are just part of growing movement by students to do something about the problem. At 2011’s Sundance Film Festival, “Default: The Student Loan Documentary,” was shown and then aired on PBS last November. The film humanizes the loan crisis, following several graduates in their struggles to pay back their loans.
In addition, a petition has been started at Studentloanjustice.org to return bankruptcy protection to all student loans.
Here's a clip from the film:
Default: the Student Loan Doc (Trailer)(old) from Default: the Student Loan Docume on Vimeo.
###
Comments
Note: Disqus 2012 is best viewed on an up to date browser. Click here for information. Instructions for how to sign up to comment can be viewed here. Our Comment Policy can be viewed here. Please follow the guidelines. Note to Readers: Spam Filter May Capture Legitimate Comments...

123 Comments so far
Show All"The people who run the world care about one thing ..... MONEY. I work in health care and have seen a few millionaires on their death beds. It is sad how they think and try to buy their way out of it, and when they realize they are at their end they look to the people who they oppressed for so long for compassion and kindness.
When they do die they are finally equal and worth the same as everybody else.... any copyrights they have held during their life no longer matter!"
Touching note, I knew a person like yourself, noble profession, my respect.
Take care.
Education has become a commodity and it is increasingly out of the reach of the working class. So the only way for most young people to get an education is to become debt slaves.
Also, far from granting forgiveness of overly burdensome loans, government legislation insures that these loans can never be waived through bankruptcy. Also, unlike other creditors, student loan collectors can garnish wages without having to go to court to prove the legitimacy of the debt. Essentially student loan collection is not limited by any normal sense of due process, and is a kind of tyranny.
But you two assh-les want to smilingly condemn the student victims.
"when does personal responsibility begin?" you ask. i guess when those personally responsible for creating this morally bankrupt ponzi-scheme are held criminally accountable or more likely, when the wall street cassino house of cards crashes to the ground.
the sons and daughters whose parents could not set aside an education nest egg fast enough to counter snowballing cost of living index believe that they borrow as an "investment" led by false claims from slick madison ave snake oil techniques. you've fallen for the spiel.
perhaps when people such as yourself accept the "responsibility" of learning the difference between "investment" and frivolous borrowing to enjoy the momentary "high" from owning tomorrow's obsolete tech-toy. that ain't happen, right?
the good news: already we see new grassroots shoots emering beneath the decay. hint: you'll not see that on tee vee.
Yes, they can choose to not go. Why should they not go?
"Free rides are a pipe dream"
Sez the guy feeding off the military trough.
Our government has chosen to rely on outrageous levels of debt to address the high costs of education. This has dramatically increased the classist nature of education in the US. Rather than address this issue, you choose to impose your reactionary views of personal responsibility on the weaker and less privileged members of our society. Your POV is ultimately oppressive and abhorent.
In an other example of apparent fraud, a law school is being sued for vastly inflating its job placement numbers for it's graduates, deceiving students into taking out heavy debt thinking they get well paying legal jobs to pay it of with. The are MANY other examples I could site, but Im just righting a comment here and not an article.
So it would appear to me that student loans are just one more example of the rigged financial racket that this countries financial sector has become. So IMHO I would not fault anyone who has been entrapped by this scam for leaving the country to get away from the oppressive debt, and start anew in a more just society.
Also here is a chart showing income vs tuition over the last 20 something years. How is this possibly sustainable? Welcome to the next financial bubble.
- The first is that of "(total) individual responsibility"
- The second is that all education, especially university education can serve for is to prepare people to make money, nothing else.
It also supposes that the USA, *the richest country in the world*, is in fact so incredibly poor that it cannot allow its citizens to study what they're interested in - it always has to be about immediate or short term economic gain. And of course all of this happens in a world where the best employment is in banks, advertising, PR and so on - basically, not doing actual productive work, just controlling other people's work, manipulating people and downright robbing them.
Frankly, I think a society where these principles rule would be a really, really shitty place to live, where people are not individuals with individual aspirations but just a more general type of cogs in a machine, always subjected to the whims of the "job market".
And finally, it's all bullshit anyway. The problem is not with education. The problem is with lack of jobs. Lack of jobs is a result of incresing productivity, increasing workload (working hours per day), work intensity and global competition. Any SANE society would recognise that if people don't need to work so much because socially necessary production can be done in 20 or even 10 hours/week (disregarding in this case the fact that agriculture and most other production but especially agriculture MUST become less "productive" and more "wasteful" with human labour because the price of labour replacement in terms of pollution and waste is just way too high) then they should NOT work as much and if they do not work, they would need to spend their time with something worthwhile - like, you know, studying and maybe even teaching for "fun", because we're, you know, humans with culture and not little fucking COGS whose most important job (sorry, it's "function", as the word "job" implies that the participant is human - while in this system most working people are just machines) is to keep a shitty wasteful and destructive economic production machine operational.
But instead, insane "liberal" societies blame the individuals (who are objectively powerless) for something they have no chance whatsoever to avoid. They should study so that they can work in - non existet and low paying shitjobs? You know what? I think that if those people have a few good years studying things they are interested in, it's worth it. They *will* get swallowed up in this fucked up world of shit later on anyway. At least they could catch a glimpse of what it could mean to be "human" in a civilised society.
In other words, why is it all right to turn talented people into fucked up financial "geniuses" robbing other people, but not all right to turn them into harmless history or philosophy buffs who are, at least, doing no harm? So many of the well-paid jobs that require university degrees are actually incredibly destructive - the problem is not with people learning "unnecessary" things but with smart people doing evil shit based on "good" and "worthwhile" (in financial terms) education.
...peace...
You're contradicting yourself. You are not consistent. In your initial post, you talk about making money, college education as a means to the end of making moeny. Engineering does not pay all that well. The pay is decent, and pales in comparision to what managers, bankers, etc make.
First, I think the general balance of engineering is pretty much as negative as possible. This is not the fault of the discipline itself, or of engineers, but the economic system they're put into. Their work to decrease necessary labour, for example, could lead to shorter working days and less exploitation - instead, it leads to longer working days and more exploitation. It is also the profession that makes large-scale environmental (and military) destruction possible. This is not mostly the personal fault of engineers (although this is in itself a complex issue) and the profession - it's just that capitalism can turn even the most productive occupations into effectively extremely destructive ones. It can do it even with teaching, let alone engineering!
Second, even in engineering, you'll see the general trend towards deskilling. Where once you had to have an actual scientific understanding, now all you need is to know this piece of software or that and you're done. Once you had to understand how things worked - now all you have to understand how a software tool that has this knowledge built-in works. And it's not just engineering. What happens in education with teachers is imo the same. These are the jobs where individual skill is needed, which means that individuals are less easy to replace and thus theoretically hold more power - don't for a moment think that this power will not be curbed as much as possible.
Finally, if you look at the economy as a whole from a material point of view, ie. from the pov of actual resource flows, how they're utilised and wasted and so on, the "cost" of education appears somewhat differently imo. It is not like education is expensive *in absolute terms*, unavoidably requiring a massive use of resources. (In some cases this is true though.) It does have a cost of course, and it is often wasteful (spending money for all the wrong things), but it is not nearly as wasteful as some actual "productive" jobs - like, you know, simply making cars - or even some of agriculture ("bio"fuels for example). That someone works doesn't immediately mean that their overall "balance" will be positive - I think the opposite is the case in a lot of places, definitely including rich Western countries and clearly even my own not so rich Eastern European one. This means that when you're "working" to "pay" for your education, a lot of people are actually wasting a lot more than what the actual cost of their education was. Of course there is a lot of waste in education too, especially the utterly idiotic and meaningless overuse of technology - but these are often things that actually make education worse.
Atomsk -- Very well thought out commentary.
It is interesting that in the rigid hyper-individualistic world of the libertarian mind, a young person trapped in a world of usurious debt is deserving of nothing but scorn & debt peonage.
The institutions that created insane debts for themselves through wild speculation, fraud, and various insurance and Ponzi schemes are bailed out by the public and government with gifts of hundreds of billions, loans of interest free trillions, debt write downs, etc. These institutions, which behave in pathological--and often outright criminal -- behavior in concocting various get rich quick schemes are, remarkably, the moral pillars of the omniscient market.
A student studying Hegal or Mozart or van Gogh is a deadbeat deserving of scorn and persecution. "Let all my children be engineers cries out one deep thinker! The market adores them."
Of course, some students may have talents in other fields of human endeavor. Apparently, Socrates was a parasite corrupting the youth of Athens (a charge he actually faced) and should have been contributing as a bridge builder. Someone who might want to study Socrates today to discover what all the fuss was about is a mere deadbeat.
Let him engineer the new parking stalls outside Pizza Hut! Or design new killer drones to wipe out the waves of enemies marching against us! There is $$$ in those endeavors.
Of course, this engineer worship is delusional since there would not be jobs for all these hordes of freshly minted engineers --despite the magic of the markets.
According to the wildly Marxist publication, the Bloomberg Businessweek, the U.S. is already turning out plenty of engineers and scientists but they are lured away from productive work into the world of the super-parasites -- the domain of financial speculation and usury within the FIRE economy.
http://www.businessweek.com/bwdaily/dnflash/content/oct2009/ db20091027_723059.htm
The cry for "more engineers" is particularly ironic since there is no shortage of engineers but rather a shortage of interest in addressing the Amerikan infrastructure crisis.
Why is that? Because there is not enough profit in it for the wizards of the market. Better to privatize and drain away public funding so the parasitic class -- the financial sector -- can maximize profits in casino style speculations. All to be bailed out, of course, by the tax payers once they find themselves up Sh$T Creek without a paddle.
http://www.infrastructurereportcard.org/
http://articles.cnn.com/2009-01-28/us/infrastructure.report.card_1_drink...
If you are counseling an individual about how to be a kind and responsible person, that is progressive.
You choose to scold the victims of the most recent exploding facet of the bankster created debt bubble.
You mock them as bubble headed philosophers, rubes who dumb enough to fall for the con. This reveals much more about your faulty understanding of the political economics of education funding than it does about the intelligence of those you cruelly mock. It also shows that your view of education can rightly be described as "philistine". Look it up.
The right wing apologits for rthe 1% started the media incivility with Newt and talk radio. Too f-cking bad if you think that only one side can get nasty.
I don't want everyone to agree, but I have no tolerance for your hypocritical and reactionary blather. We've all heard enough of your brand of oppressive and hypocritical morality which always ends up serving the interests of the wealthy and powerful. .
1. Raise tuition costs at public schools - helping force people into private for profit schools such as Kaplan U and U of Phoenix.
Student loans guaranteed by the fed guv -
Many of these for-profit schools have up to a 40% default rate -
Follow the money - one of Pelosi's biggest contributors is the Owner of U of Phoenix and
Feinstein's husband is on the Board of Regents of the University system for California where privatization and Profiting off federally guaranteed debt is the new business model.
http://archives.kpfa.org/data/20120305-Mon1700.mp3 - flashpoints News program. Listen to the clips at 9:00 in and at 35:15 min in......
http://www.truth-out.org/kaplan-university-pays-executives-quarter-billi...
If one listens to the clips - it'll simply blow your mind the insidious nature of privatization pushed by both rethugs and democrats -
And it's All about profiting off the misery of others.
As if feinstein and Pelosi don't have enough jack - they'll gladly force students into Debt Slavery to get another nickle. How anyone can vote for Either party is beyond me.
What you (well, we, of course) need to do is not to reinforce and extend Western domination over and exploitation of the rest of the world. Forget "exporting" shit. Forget "access" to resources and trade. Forget "national interests" on the other side of the world. All bullshit. Build a society that stands in itself (as much as possible) and doesn't rely on other countries for "markets" and "resources" (material or human) and uses its *own* wealth for the good of *its own* people. And, you know, education itself is part of this, but not just (and not even mainly) as a creator of wealth but as a creator of happiness and "humanity" or whatever you may call a happy and fulfilling life.
I quite agree. The way forward IMHO is to treat out repsective societies/nations like a closed system. Imagine it as one of those self contained systems groups like "The Mars Society" build up in the North. They try and simulate a colony in space where they can not rely on any goods coming in or going out and must rely instead on only what they HAVE internally in the system.
They get very very creative.Needless to say the concept of property, Capitalism and this is MINE can not survive in such a system.
Think of the Mutineers of the HMS Bounty who took the ship and the bulk of the resources while those that remained loyal to The Captain were set adrift in an open boat with a minimum of supplies. Bligh and his men did much better with less. The limyed resources they had were all the more precious so they could not waste them.
Another companion piece would include Paul Krugman's column today headlined "Ignorance is strength."
http://www.nytimes.com/2012/03/09/opinion/krugman-ignorance-is-strength....
Now that the the threat of socialism at home has been eliminated, the 1% want their bribes back. Without the USSR, without any real mass movement in the US, the 1% doesn't fear the masses anymore and so sees no reason to support public institutions and programs which benefit the masses.