The Cost of Higher Learning

By Jeff Waldorf


As a student, I am painfully aware of the personal costs of paying for college. As someone who is low-income and hasn't had the benefit of being able to borrow money from their parents for college, I know what it's like to be staring at a mountain of future debt. I know many who are in my position and others who have graduated -- to end up not using the degree they worked so hard and paid so much for.

The Atlantic had an excellent article that spelled out the situation that many prospective college grads fear. It boils down to one question:

Will I be able to find a job when I graduate?

Now, there a couple of points in that article I don't agree with, in that I don't think the degrees are worthless. Higher learning should never be considered worthless. Educational pursuits are what help create thinkers, artists, and academics that are necessary for cultural advancement. But in this corporate consumer society, those educational pursuits have been swept to the wayside in favor of careers in high finance.

There's obviously a great financial incentive to work for places like Goldman Sachs. This graph from the Huffington post shows the number of students that graduated with six-figure debt.


But for those who are not good with numbers, or are not thrilled with the idea of working for high finance, or those whose careers have been impacted by the recession, these numbers are scary.

My wife's biggest fear is graduating with her medical secretary degree and not being able to find work, and not being able to afford the $20k+ of student loans she alone has had to borrow. She's also afraid of being in default.


Credit: Yewon Kang/Medill

According to a study by the Department of Education, the national student loan default rate continues to rise. Along with the unemployment rate. In 2008 the default rate for students was up to 7.2%. That's up from 6.7% the year before, and 5.2% in 2006. This trend doesn't show any signs of changing.

As unemployment continues to stay more or less at the current rate for those with a Bachelors degree or higher, at least until the 2012 election is over, we will continue to see the default rate climb as more and more students, hoping to climb the income ladder, face tougher times.


One of the bigger drivers of debt and default are the prevalence of for-profit colleges. Places like Full Sail University that have given contributions to the Romney campaign, ITT Technical Institute, and the University of Phoenix. These schools charge very high tuition amounts that force students like myself to borrow from private banks who also lobby the government to keep Federal student loan money flowing into their pockets.

The University of Phoenix, which is owned by the Apollo group, gave $75,000 to Mitt Romney's Super-PAC: Restore our Future. James Heavener, CEO of Full Sail, gave $85,000 to Restore our Future. It's fair to note that Full Sails' Co-chair Ed Haddock contributed $60,000 to Barack Obama's campaign in 2008, and John Sperling, founder of the Apollo group itself, has so far donated $47,800 to Democratic congressional races. Though the for-profit schools are mainly backing Mitt Romney this time, it appears their influence will be felt no matter who is in charge. 

Now on to my story:

It was 2004 when I decided to go to ITT Tech hoping to get my shiny new degree. I borrowed about $3,000 from a private bank to afford tuition, a big mistake on my part. Nearly a year into my education, I lost my job and couldn't find another. In the end I went into default. Working crappy job after crappy job for the next few years, I paid my loans when I could, but that wasn't often, so the interest rate nearly tripled my loan.

Source-_Federal_Reserve_Bank_of_New_York.jpgSource: Federal Reserve Bank of New York
Credit: Lam Thuy Vo/NPR

has some amazing statistics on just how much debt students have amassed nationally. It's huge. It even surpasses the much-maligned auto bailouts, and even credit card debt.

So here I am: $9,000 in private loan debt that can't be refinanced, cannot be discharged, and due to my financial situation, cannot be settled. Because the banks own it.

But I'm not alone. 

So with all of this debt, and all of these defaults, one has to wonder if getting an education is really worth it. To that I say, Yes.

Here's why: As the world gets more technologically advanced, the hard labor jobs will continue to disappear from the United States; in fact, many have, either due to technology or outsourcing. Even though manufacturing in America is making a comeback, many of those jobs are demanding skilled workers to fill them. 

Now, I need to make an important distinction: education doesn't mean going to a college, specifically. Trade schools are also considered places of higher learning, of higher education.

So even with all the problems, and fears, I still believe education is the best path towards the middle class lifestyle. I am sure that with time and pressure, we can force our political establishment to look at the problems of rising tuition, debt, and default, as well as unemployment for grads, and unscrupulous debt collectors and challenge them to fix these glaring problems that face every prospective student, and graduate that has put in the time, money, and effort to try and better their lives.

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