When we tire from worrying about North Korea, Iran, fiscal cliffs and sequestering, we can sit back and luxuriate in the knowledge that our institutions of higher education are still doing their job of opening the door of opportunity to permit successive generations of students to achieve both educational and economic advancement. Regardless of the circumstances of their birth, or of the wealth of their families, talented and ambitious students rest secure in the knowledge that their efforts will be recognized and rewarded by top colleges and universities. Because of their enormous endowments, these institutions now more than ever have the capacity to be need-blind in the admissions process, meaning that students will be admitted without regard to their ability to pay.
Oops! Maybe it’s time to go back to thinking about nuclear weapons and cliffs. Several of the wealthiest campuses have recently announced that they are reducing their aid packages for needy students and are no longer offering need-blind admission.
Last week, I commented on Charles M. Blow’s March 9 column in The New York Times, which focused on the problem of student debt. I discussed the factors that contributed to the sudden growth of educational debt and steps that are necessary to rectify the problem (or would at least prevent it from becoming worse).
I ran out of room before I could get to the issue of assessing how big a problem student debt really is – hence, Part II this week.
On the one hand, student debt has increased dramatically: roughly $1 trillion in total debt, more than twice what it was just eight years ago, and larger in size than the total of all credit card debt. On an individual level, approximately half of the student population borrows to finance their education, and they graduate owing an average of about $26,000.
In his column in The New York Times on March 9, Charles M. Blow states: “We are reaching a crisis point in this country’s higher education system” because of “staggering levels of debt.” He notes that student loan debt has more than doubled in the last eight years, to almost $1 trillion, and that, not unexpectedly, student loan debt is hardest on families in the bottom quintile of family income. Mr. Blow ends his column with, “We are on an unsustainable track. This will not end well.”
How is it that this problem has become so large so quickly? How do we fix it? Is this as big a problem as people claim?
I’m glad you asked. This is a problem that resulted from many intersecting forces: