Not long ago I posted a lengthy treatise (several posts) on the unwarranted costs associated with securing a College degree. One area of concern that I did not adequately address was the impact of these costs on the taxpayer. The advanced education system is heavily subsidized via student loans. Keep in mind that these costs have increased over the last 2 decades at a rate of 3x that of overall costs.
Updated: January 24, 2018
It’s 2018 and Americans are more burdened by student loan debt than ever.
You’ve probably heard the statistics: Americans owe over $1.48 trillion in student loan debt, spread out among about 44 million borrowers. That’s about $620 billion more than the total U.S. credit card debt. In fact, the average Class of 2016 graduate has $37,172 in student loan debt, up six percent from the prior year.
Since these are loans and not grants how does this impact us. Currently the default rate is in the neighborhood of 10%. I have not been able to verify the actual cost to tax payers, but if we assume a 10% default rate and an average of 4 years borrowing that would equate to an annual write off to tax payers of almost $40 Billion. This is not acceptable!
Our government does little to mitigate the rise in these costs. Actually, they facilitate the increases by loaning without questioning the rates that are being charged. While only slightly more than ½ of these borrowers actually earn a degree we still are successfully pumping out about 3 million that earn a four year or higher degree. Only 15% of graduates are assured a college level requirement job on graduation and over time only 40% ever realize this level of employment. About 40% will end up taking a subpar job, often in area not related to their college major. Fully 20% will end up in low paying positions where their high school graduate compatriots have had a four year head start on career progression.
All of this is taking place while there is a shortage in many of the technical skill trades.