The American higher educational system is ranked by many as the best in the world – and it had better be for the price tag that is attached to it, argues Christine Wendel for Pandeia.
For tuition and living expenses, Americans will pay an average of $19,000 per year to attend a four-year public university. This means a total price tag of $76,000 for a bachelor’s degree, and that’s if the student graduates in four years. If he or she attends a private university, it will be an additional ten to fifteen thousand dollars more each year, and if students want to pursue a programme at a public university in a state outside of their own, they should be prepared to shell out double the price of attending a school in their own state.
Talk about a lot of money, considering that it is almost mandatory nowadays to have a college degree in the US in order to earn more than minimum wage – $7.25 per hour. People earning minimum wage, even working several jobs, are below the poverty line.
However, a problem is growing among the approximate 20 million Americans who attend college each year. They are having trouble paying back the thousands of dollars in student loans that are piling up. Even with their degrees in hand, the job market is not putting enough graduates to work, leaving debt defaults to follow. No job, no money, no debt payments.
Next to mortgages, student loans are the second largest type of consumer borrowing in the US. About two-thirds of all Americans who attend college take out student loans to cover the cost of earning a degree. By the time the average college student graduates, he or she owes an average of $26,000 in student loans.
Try walking out into the world with $26,000 in debt and feeling positive about the future. In October, Bloomberg reported that U.S. borrowers all together owe over $1.2 trillion in student loan debt. It was once an option for some graduates to move back home with mom and dad for a couple years after graduation. Now, for many, it is the only option.
Why such high tuition costs?
The Washington Post explains that there has been a 20 per cent drop in state funding and donations towards higher education institutions since 2000. This has led to a larger burden on tuition payers since universities want to keep the same standards. Forty-seven states have had at least a ten per cent increase in tuition within the last five years KBIA Radio reported in October. The state of Georgia had the greatest tuition fee increase of all public universities – a whopping 65 per cent since 2008.
Young Americans want to pursue an education, but the burden of huge student loans that will follow may lead some to think twice. This, however, is not the only problem. Bloomberg reports that 14.7 per cent of those with student loans have defaulted on their debt payments. That is up from 13.4 per cent in 2012, and is the highest default rate since 1995.
Compared to many European countries where education for all who are willing to put forth effort, the American system seems flawed. It is all about who has the money. If you have parents who are alumni, you can receive higher education. If your parents can afford to pay in-state tuition, you can receive higher education. But, if neither of these are the case, you can count on one large student loan bill following you around once you’ve been handed your degree.
The worst part is that students don’t understand.
Most students do not even realise what taking out huge loans entails. Seven million Americans have defaulted on student loan payments. A default can have serious consequences, even impacting future employment as many employers now perform credit checks before hiring. High interest rates on student loans and a market economy that has not been strong are both attributed to defaults.
A professor of European Journalism in Brussels told his pupils if European students were paying American prices for universities there would be riots in the street. Maybe it can be attributed to the US’ laid-back, positive, American-dream attitude. For whatever reason, there are no riots in the streets, no contests to sharp tuition hikes, only students continuing to take out more and more student loans to pursue an education.
photo by Truthout.org