At a time we're telling young people that a college degree
is a passport to financial security, we're neglecting to tell them it can also
be a ticket to bankruptcy.
Tuesday, students at the University
of Southern Maine
protested, with a giant ball and chain no less, the growing risk and burden
student loans are becoming to students in higher education.
The Maine Public Interest Research Group estimates that 39.3 percent of public
college graduates would have unmanageable debt if they took teaching jobs in Maine. The group estimated
that 37 percent of them would have unmanageable debt as a starting social
worker.
At the University
of Southern Maine, more
than half of the students graduate with more than $21,000 in debt. Moreover,
many of them come out of college with car loans and credit card debt to boot.
Some of that, of course, may be the result of reckless spending, and students
have no one to blame but themselves if that debt involved multiple spring trips
to Cancun.
On the other hand, neither colleges nor lenders level with borrowing students
about realistic levels of debt that they will be able to handle in various
occupations. For instance, as one young woman at USM pointed out, she hopes to
be a social worker and will graduate with $50,000 of debt.
Worse, students seeking postgraduate education can quickly double or triple
their college debts. And, of course, many of the lowest-paid professions, like
teaching, increasingly require a master's degree.
Of course, it is reasonable to expect students and parents to share in the cost
of a college education, but every report we've seen shows colleges becoming
more and more expensive and financial aid and loans increasingly unavailable.
Now, the federal government is increasing the interest rates on student loans,
which will cost students thousands more to attend college.
There are multiple dangers in this trend:
First, that students will increasingly avoid professions that don't pay well.
Many of those, unfortunately, are in the public sector.
Second, that students will default on their college obligations, ruining their
credit just as they are starting their young lives.
Third, that parents who are picking up larger and larger college debts
themselves are not saving for their own imminent retirements, even as Social
Security teeters and private pension plans disappear.
Finally, that students will choose not to attend college at all.
This problem is particularly acute in Maine,
where many students come from families of modest means and where a public
education is generally more expensive than other states.
On top of that, because of Maine's
lower wage rates, students will emerge from college even less able to survive.
A good first step would be to restore the higher interest subsidy for federal
student loans. Otherwise, an already serious problem will become a lot worse.
