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The same brilliant people who turned home ownership into a crushing burden for millions of Americans have now managed to do the same with a college degree. They’re just trying to help people. But, they are from the government, so when they try to help they do just the opposite and make the problem worse. Because the government always f__ks up (Pickerhead’s Iron Rule of Government). Last Sunday’s NY Times featured an article on student debt that was located above the fold, front page, front section.
Kelsey Griffith graduates on Sunday from Ohio Northern University. To start paying off her $120,000 in student debt, she is already working two restaurant jobs and will soon give up her apartment here to live with her parents. Her mother, who co-signed on the loans, is taking out a life insurance policy on her daughter.
“If anything ever happened, God forbid, that is my debt also,” said Ms. Griffith’s mother, Marlene Griffith.
Ms. Griffith, 23, wouldn’t seem a perfect financial fit for a college that costs nearly $50,000 a year. Her father, a paramedic, and mother, a preschool teacher, have modest incomes, and she has four sisters. But when she visited Ohio Northern, she was won over by faculty and admissions staff members who urge students to pursue their dreams rather than obsess on the sticker price.
“As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” said Ms. Griffith, a marketing major. “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”
With more than $1 trillion in student loans outstanding in this country, crippling debt is no longer confined to dropouts from for-profit colleges or graduate students who owe on many years of education, some of the overextended debtors in years past. As prices soar, a college degree statistically remains a good lifetime investment, but it often comes with an unprecedented financial burden.
About two-thirds of bachelor’s degree recipients borrow money to attend college, either from the government or private lenders, according to a Department of Education survey of 2007-8 graduates; the total number of borrowers is most likely higher since the survey does not track borrowing from family members.
By contrast, 45 percent of 1992-93 graduates borrowed money; that survey included family borrowing as well as government and private loans. …
… “If one is not thinking about where this is headed over the next two or three years, you are just completely missing the warning signs,” said Rajeev V. Date, deputy director of the Consumer Financial Protection Bureau, the federal watchdog created after the financial crisis.
Mr. Date likened excessive student borrowing to risky mortgages. And as with the housing bubble before the economic collapse, the extraordinary growth in student loans has caught many by surprise. But its roots are in fact deep, and the cast of contributing characters — including college marketing officers, state lawmakers wielding a budget ax and wide-eyed students and families — has been enabled by a basic economic dynamic: an insatiable demand for a college education, at almost any price, and plenty of easy-to-secure loans, primarily from the federal government. …
… Much like the mortgage brokers who promised pain-free borrowing to homeowners just a few years back, many colleges don’t offer warnings about student debt in the glossy brochures and pitch letters mailed to prospective students. Instead, reading from the same handbook as for-profit colleges, they urge students not to worry about the costs. That’s because most students don’t pay full price.
Even discounted, the price is beyond the means of many. Yet too often, students and their parents listen without question.
“I readily admit it,” said E. Gordon Gee, the president of Ohio State University, who has also served as president of Vanderbilt and Brown, among others. “I didn’t think a lot about costs. I do not think we have given significant thought to the impact of college costs on families.” …
… At Ohio State, “college can be a reality for everyone, no matter your income or background,” its Web site says, while at Ohio Northern, future students are urged to get over the “sticker shock,” and focus instead on “return on investment.”
Oberlin College’s Web site tells prospective students that its financial aid policy is simple: “We meet the full demonstrated financial need of every admitted student.” The University of Dayton declares itself “one of the most affordable private Catholic schools in the country” and a “lifetime investment, appreciating over the course of time.”
The costs for these colleges? At Ohio State, about $25,000 a year for tuition and fees, room and board and living expenses; at Ohio Northern, about $48,000; at Oberlin $60,000; and at Dayton $48,000.
Colleges are aggressively recruiting students, regardless of their financial circumstances. In admissions offices across the country, professional marketing companies and talented alumni are being enlisted to devise catchy slogans, build enticing Web sites — and essentially outpitch the competition.
Affordability, or at least promising that the finances will work out, is increasingly a piece of the pitch. …
… “The overall message was, ‘It’s doable and normal to go into that much debt,’ ” said Jillian Potter, 23, who grew up in Ohio and attended Anderson University, a nonprofit private Christian school in neighboring Indiana.
Ms. Potter figured she would have to borrow about $10,000 a year. But the tuition increased every year, and because she didn’t declare a major until her junior year, she needed five years to graduate.
A social worker, she now owes $80,000. “I try not to think about it because it’s really depressing,” she said. …
… Wanda McGill has stopped opening her student loan bills.
She isn’t sure how much debt she has accumulated, though she thinks it’s about $100,000. But Ms. McGill, a 38-year-old single mother, knows for sure she cannot pay it.
Ms. McGill said she dropped out of DeVry University, a for-profit college with a branch in Columbus, two years ago after she ran out of money — even with the loans. She now makes $8.50 an hour working for an employment training center in Florida.
“I was promised the world and was given a garbage dump to clean up,” she wrote in an online complaint at consumeraffairs.com. “Like my life was not already screwed up with welfare and all.”
The student loan crisis has spread from for-profit colleges to more traditional institutions, but the for-profit colleges continue to represent the worst of the problem. Students complain that they were misled about the costs of education and that their job prospects were exaggerated. Government reports and lawsuits have accused some for-profit colleges of outright fraud, including doctoring attendance records or peddling near-worthless degrees. …
So how’s things with law graduates? Paul Campos, law prof at Colorado posts in Salon.
Last summer a young lawyer wrote to me about her struggles to find employment. Her story was all too familiar: After graduating with honors from a middling law school, she was unable to find a real legal job, and was reduced to taking a series of temporary, low-paying positions that did not allow her to even begin to pay off educational debts that, three years after graduation, had ballooned to nearly a quarter of a million dollars.
Rather than merely lamenting her situation, however, she explained to me she was more fortunate than many of her fellow recent graduates: “I know that I am better off than a lot of these younger lawyers. I get job interviews. I can afford the apartment I share with my friend. I have a great resume. I am an excellent researcher and writer. I rarely go to bed hungry anymore.”
That last sentence stayed with me. I have been researching what’s been happening to recent law school graduates, and it’s no exaggeration to describe the situation as a growing catastrophe. The statistics are shocking:
Approximately half of the 45,000 people who will graduate this year from ABA-accredited law schools will never find jobs as lawyers. (The Bureau of Labor Statistics estimates that over the next decade 21,000 new jobs for lawyers will become available each year, via growth and outflow from the profession.)
Most of those who do find jobs will be making between $30,000 and $60,000 per year.
People currently in law school are going to graduate with an average of $150,000 of educational debt. …
For a change of pace, The Economist has an obit for a poker player.
IF YOU found yourself sitting at the poker table opposite Amarillo Slim, you were wisest not to say one word. He might try to get you talking, of course. How are you and how’ve you been, any sort of yakking. Best to keep quiet. He could get a tell from you just by watching the sweat on your upper lip. In fact he could know your whole hand by looking at the pulse in your cheek. If you tried to read him back, you’d find those cool hard eyes hidden in the shadow of his big old Stetson hat. He had a rattlesnake head on the band of it—killed by himself, so he said—and he might tell you that as a token of affection he’d put a rattler in your pocket and ask you for a match.
He looked like a Texas cowboy, and that was what he was, with a big spread of acres and many head of registered longhorn cattle. He could rope and drag Arabian stallions faster than they could run, and talk feedlots and milking schedules with the best. But then you noticed that this sonnagun had custom-made ostrich boots with spades, clubs, hearts and diamonds on them, and gold one-dollar-pieces sewn over the buttons on his shirts (or, for best, the uncut emeralds sent to him by Pablo Escobar to apologise for abducting him in Colombia by mistake). Mighty fancy gear, and company, for a cowboy.
He was so tall and scrawny that he said he feared the bathtub as a boy, in case he vanished down the drain. You’d think you could easily bust his skinny country ass. But when he moved in he was tight and fierce, aggressive as a grizzly bear. So though he sounded like a bumpkin it was all part of the bluff, for you didn’t win four World Series of Poker without a master’s skill in mind-reading and arithmetic, and nerves of steel to match. …