Tuesday, September 13, 2011

Student Loan Defaults on the Rise

WSJ 9/13/2011 p. A2

"By Sept 30, 2010, 8.8% of federal student loans whose payments started coming due in the previous fiscal year had fallen into default....The results were skewed higher by for-profit colleges whose students' default rate jumped to 15% from 11.6%"

Majia Here: Today's college students face a bleak job market and unprecedented student loan debt.

Public universities are receiving less money from states and are shifting rising costs to students. When I started San Diego State back in the early 1980s, tuition was $265 a semester. Today, the university where I teach charges students approximately $4,000 a semester for tuition.

Public universities are still a bargain compared to the for-profits. I have known individuals who worked for the biggest players in the for-profit field and the pressure to "sell" degrees to students was all-consuming and seemed to exahust far more resources than actually delivering the degrees sold.

Still, even students who graduate from public universities face large debts when they graduate.

Unemployed and underemployed college graduates struggle to repay relatively large student loans. Finaid.org explains the debt burden held by graduating students:

"The median cumulative debt among graduating Bachelor's degree recipients at 4-year undergraduate schools was $19,999 in 2007-08. One quarter borrowed $30,526 or more, and one tenth borrowed $44,668 or more. 9.5% of undergraduate students and 14.6% of undergraduate student borrowers graduating with a Bachelor's degree graduated with $40,000 or more in cumulative debt in 2007-08. This compares with 6.4% and 10.0%, respectively, for Bachelor's degree recipients graduating with $40,000 or more (2008 dollars) in cumulative debt in 2003-04.." http://www.finaid.org/loans/

The WSJ article on student defaults notes that a Rutgers Univ survey of 571 college graduates conducted between 2006 and 2010 found only 53% held full time jobs.

Unable to find jobs that provide a "living wage," many college students are returning to their parents' home.

The lack of decent paying jobs for young people has led to an incredible poverty rate of 42.8% for 25 to 34 year olds (Dougherty, C., & Murray, S. 2010, September 17 "Lost Decade for Family Income. The Wall Street Journal, p. A1, A4)

I believe a college degree is still a desirable route for the purposes of education, citizenship and career preparation but I wish we as a nation would invest in our educational system at the same level we invest in our military-industrial complex.

Truth is Treason reports that the "military’s share of the approximately $3 trillion 2011 budget is about $1.6 trillion" http://www.truthistreason.net/2011-defense-spending-bill-taxes-largest-in-history

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