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Quick Thought: College Debt is Too High. Period.
Lots in the news lately about the crushing debt college graduates have. Here's one:

And in July, a new federal program that allows former students to cap their monthly loan payments at 15 percent of their income kicks in. The program is designed to provide relief to graduates who enter traditionally lower-paying sectors like teaching or social work. In some fields, public service loan forgiveness will be available after 10 years of payments, and graduates working in any field will have their remaining balances forgiven after 25 years.

"Graduates should look into all their options," Draut said. Income-based repayment can be a lifeline for some graduates, she said, and the 25-year limit provides light at the end of the tunnel.
Look, I don't mean to be sadistic. But if they lower the interest rates on loans students have to pay, or lower the payments that students have to pay, you CREATE MORE PROBLEMS and EXTEND THE RACKET.

The best way to get rid of the student debt problem is for students to actually feel the consequences of their debt. Then people would start to protest, fewer would go to college, we'd realize how overrated so many degrees are, and people would start businesses and become entrepreneurs again. And maybe companies would stop requiring useless degrees for a job that at one time not too long ago was done by a high school dropout. (I wrote about that here).

It's simple demand and supply. Right now there's high demand, even at ridiculous prices, because we think we need degrees, and governments will bail you out. But if we let people feel the consequences of the debt, we'd lower demand. And then prices would go down.

But if we let students off the hook, we simply increase the amounts colleges can charge, because people think "eventually my debt will be forgiven". And then more and more get into huge debt! We make the problem worse!

And if Congress starts telling banks they can't charge students who are late on their payments high fees, then the banks will start passing those costs on to everyone else.

College debt is a huge problem, but it's not a huge problem because of the banks. It is a huge problem because students are willing to take on that debt in the first place hoping to get jobs which just aren't there. If people truly did the risk/benefit analysis, we'd all be better off.

The only ones who are winning right now are the colleges which teach horribly and fail to prepare students for real life.

It's time we parents stopped shelling out $100,000 for an education that won't really get them anywhere.

Now I'm not against education. My kids will go to university. But they have a plan for a specific career, and we've saved the money for it. I would never let my child get a liberal arts degree on credit with no plan. That's ridiculous. And it's time we North Americans woke up to what a racket most universities are running. And it's time that Congress stopped trying to make it easier for universities to bankrupt us, which is what they're doing if they start lowering interest rates.

The only way to stop the racket is to let students feel the depths of the financial pain. It's cruel, I know. But what else are we going to do?

I'd really like to know what you think. Let's get a debate going! Maybe I'm wrong, but I do think this is getting ridiculous.

UPDATE: More evidence that the debt load is unsustainable: only 20% of grads have jobs.

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At 2:36 PM , Blogger Berji's domain said…

My Husband and I have huge student loan bills to pay off thanks to 8 years (combined) of private undergrad and 8 years (combined) of grad school. My parents wanted me to attend a private Christian school, they paid for what they could, I had to take out loans (and work!) the rest of the way. Same with my husband. In the end, our bachelor degrees in our respective fields didn't mean much. If we wanted to get a job, we needed more education. So we did. We worked and studied at the same time and also had to take out loans. A kid right after graduating meant I wasn't able to work to pay off the loans. Would I do it again? yes. From an educational view point, there are things you learn in college and grad school, ways to think and process that you rarely find in people that only go through high school. As an experience, yes I would do it again. Are we asking for forgiveness/handouts on the loans? Nope. We are slowly paying them back. Will I use my degree? I don't know. Am I sure God wanted me to get that degree? yup, pretty sure. I have no idea why, but I think he did.
I think there are a lot more nuances to the problem that can be posted in a comment section :) so I'll leave it at that.


At 2:55 PM , Blogger Sheila said…

Excellent point made above by Berji, whose experience sort of matches mine.

I have a postgraduate degree, too, that I don't really use because I chose to stay home with my kids. But I don't regret university at all. There are some great points to it.

I just think that it's becoming too expensive, and the idea that we should somehow forgive debt or lower interest rates will only make it MORE expensive. If you feel called to go to university by God, go. I did. But if you're just going to get a job, think twice.

There are other ways to spread your wings or learn independence. And there are other ways to get training. But I'm still glad I went. I hope that doesn't make me a hypocrite!


At 3:36 PM , Blogger Sarah DeVries said…

Hi Sheila, I always enjoy reading your blog, particularly as a fellow Quinte area mom. I have been noticing that some of your articles / posts, however, have a very American slant to them. Are you an American living in Canada? As a graduate of a Canadian university, I don't for a minute regret my post-secondary education, just the debt attached. I should have saved up for it rather than using gov't loans. I would be interested to hear more on issues like these from a Canadian perspective.


At 7:46 PM , Blogger Sheila said…

Hi Sarah,

Great to know there are other Canadians reading this blog!

You're right, I do write a lot about American news events, but it's mostly because most of my readers are American, and most of the people on the social networking sites I belong to are American. So I'm just trying to participate in some of the conversations they're having!

As for a Canadian point of view, I don't think I'd change anything that I wrote. The column that I linked to in my post that I wrote I did write from a Canadian point of view, and it pretty well sums up what I think.

The cost of Canadian universities has skyrocketed in the last ten years, too, and we have the same issues with student debt that the U.S. does, though perhaps not quite to the same crippling extent. If we want university to be worth it more and to be more affordable, then we have to start putting pressure on the universities to create a better product (especially in the liberal arts; the rest is still pretty good, especially the sciences) and to keep costs under control. They're not going to control costs while the loans are still readily available, and while government is always there to reduce interest rates.

And that, I see, as a problem. I think too many high school seniors are being sold a bill of goods. There are lots of good reasons to go to university, but if your main goal is to be qualified for a job, then a liberal arts education may be money not well spent. And I do think we need to wake up to that fact!


At 11:06 PM , Blogger pedalpower said…

I really don't think sticking it to a generation of students is the way to fix this.

How about if employers stop demanding a degree (and they don't care what in) for you to get an interview for a job that doesn't necessarily take a degree? I dropped out of college due to financial reasons many years ago. I now wish I had stuck with it and finished, regardless of the debt. When you don't have a degree, too many doors are closed needlessly by employers.

Yes, I have started my own business now that my kids are grown, but there are financial risks there too...and no steady paycheck in the meantime. I'm telling my daughter to stay in and get her degree.


At 11:18 PM , Blogger Sheila said…


I think it would be great if employers stopped demanding a degree! That's one of the things I said in the article "Is University Overrated"? We need a new way of showing that people are qualified for a job that doesn't require you to spend $100,000 on what is usually of dubious educational value.

The problem is it's a vicious circle. Employers won't stop demanding a degree until qualified people stop getting one--and the quality of university grads goes even lower (which it likely will soon).

On the other hand, let's say you start at a low-wage job at 18, and save part of your wages. You move out at 20, live frugally, and slowly get raises. You'll be able to buy a house far sooner than a grad who isn't guaranteed a job and who has a mountain of debt. Many of my friends in their twenties who didn't go to college, but got qualified in manual trades or started businesses, are better off financially than those who did.

For some people (especially women, I think) university is important. Many men, who are more into trades, can make more money more easily without the degree. I think it's pathetic that it's gotten to this point, but it has. And asking a 22-year-old to start life owing R$50,000 is ridiculous, unless he or she is now qualified as a doctor.


At 7:04 AM , Anonymous Cassandra Frear said…

This post is poignant and relevant. We have two college-aged sons. The whole process of planning for college and paying for college is like a vast and challenging odyssey. We are very grateful that we will be able to send them off into the adult world without debt. But we (and they) had to work very hard to do it.

In spite of our best efforts, they may or may not actually end up working in the field that was their major in college. Young adults are in a period of tremendous change and ongoing discovery. Often, that change leads them in unexpected directions. This is the case for our oldest son who, after four years of school, realized that what he thought he would be doing is not a "fit" for him.

This is hard, but we have to let them have the freedom to make their own choices, and not demand that they "cash in" the investment we made for them according to the original plan.

Bottom line: I think it's too much pressure to demand that they have a definite career plan at age 18 that they will absolutely follow after graduation. It's just not realistic. Most kids change their major more than once.

So what to do? Pick a school that offers a solid program with many worthy options, so a change in direction doesn't necessarily mean a change in address. And remember, it's not ALL about job preparation. There can be other reasons for college, too.


At 12:07 PM , Blogger Catherine R. said…

Feeling the pain here.

I have so many negative and overwhelming emotions regarding my student debt that it's hard to even think straight about it. It wouldn't be wrong to say I am probably on one end of an extreme. I passionately hate that I went to college and even more so the debt.

I saw a lady on Dr. Phil (I know, I know) recently who became a prostitute to pay off her student debt. Not that I would ever do that at this point but, hey, makes sense. What else are you gonna do?! It's not like you can get an actually job with the degree these days and the agony of massive, crushing debt makes people feel desperate. I feel desperate sometimes.


At 4:19 PM , Blogger OhLookADuck said…

Great topic!

My husband has only a high school diploma yet is one of the most educated people I know. He's been in management for the last 14 years and now is Plant Manager for a geothermal utility company and there is nothing--*nothing* he isn't willing to learn. He's not naturally talented in some areas, but he's always willing to put in hard work to learn it and now he is incredibly valuable in his line of work and it's all self taught.

We've homeschooled all our children and have pretty much come to the conclusion that many job situations are willing to train a person who shows up to work (!) on time, and with a willing attitude. Someone who is willing to learn what the boss wants to teach is a rare thing indeed. Coming out of college with a degree sometimes makes the newly hired employee feel like they are owed something and that's rarely a plus in a work situation.


At 12:59 AM , Anonymous Anonymous said…

I too have massive amounts of student loans. I went to a private undergraduate and walked away with a 120k piece of paper. With scholarships, hard work and commitment, I paid for a full half of that educatin, but that still left 60k to pay off. I too found that my BA was next to useless. I had to get an MA and I'm now working on my PhD. I refused to go further into debt, however, and paid for my MA out of pocket and my PhD is a fellowship, which means I not only get full tuition remission, but I get paid to go to school. As a PhD student, I'm involved in the administrative aspects of my school and part of the reason that tution is so high is that, particularly right now, the goverment is cutting the budget by millions upon millions. Tuition is expected to be raised a whopping 40% this coming year. If I didn't have tuition remision, I'd have to drop out. Goverments (American or Canadian) should focus more on supporting students as they educated by financing the schools appropriately, and putting tuition caps on the schools. Some schools charge as much as they do simply because they can. (My lovely 30k a year school served lobster once a week...yeah, that was totally a necessity).
Despite my debt, and it is at times crippling. I don't regret my education. I learned so much, not just book learning either. I grew up. I learned responsibility. I learned what 30k actually means. It was a painful lesson. However, I, don't have credit card debt cuz I know it's so terrible. So I say let the goverment fund the schools, rather than bail out the students after they've sunk their credit.


At 1:03 AM , Anonymous Anonymous said…

PS. So sorry about the typos. That's what I get for typing without my glasses.


At 4:20 PM , Anonymous Shanna said…

I have been an admissions counselor for a Christian liberal arts college for 8 years. Even though I'm in the field everyday, it still amazes me how much tuition costs have changed over the past several years. Because our school is so small, I can meet individually with parents and students to discuss payment options and I cannot in good conscience advise students to take on huge amounts of debt to attend college. Some debt is ok in my book because it is an investment. But 100K for undergrad education is crazy!
I have advocated for a while that colleges who offer loans should also be offering classes to help students understand finances. I would love to see all of our students attend classes to learn budgets, loan processes, saving money, and overall responsibility for finances. We can’t expect students to take on the burden without educating them on the entire process which is what we are currently asking of them.

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About Me

Name: Sheila

Home: Belleville, Ontario, Canada

About Me: I'm a Christian author of a bunch of books, and a frequent speaker to women's groups and marriage conferences. Best of all, I love homeschooling my daughters, Rebecca and Katie. And I love to knit. Preferably simultaneously.

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