The crisis of our education

While students view their education as an investment for a brighter future that would grant them increased job opportunities, higher total lifetime earnings and even the ability to live longer lives, neoclassical economics views education as a profitable industry that can be exploited for personal gain.

Since neither student aid nor family income have kept pace with the increasing costs of tuition, the majority of students have needed to take out loans to help pay for their education.

Lending institutions like the federal government and private banks have loaned students the funds to help finance their education.

But why have they let students borrow increasingly more money?

For one, student loan debt is unforgivable if a person were to go bankrupt. In other words, banks, businesses and credit card debtors can discharge their obligations if they cannot make their repayments.

But this is not the case with student loan debt: Even if a person cannot pay their student loan debt, the interest on their debt will continue to accumulate.

Thus, these lending institutions have given students massive amounts of credit, regardless of their major future career goals, or their ability to pay back their debt.

This is quickly becoming a major problem. Student loan debt hovers over $1.2 trillion, with over 40 million Americans averaging $28,400 in student loan obligations.

So why do students continue to borrow more money to put themselves through school?

One reason is that students assumed that it would increase their job prospects once they graduated.

But where are the jobs? In the last 12 months, the Bureau of Labor Statistics estimates that just over 2.6 million jobs have been created. However, not every job that is created is equal.

According to a report by the National Employment Law Project, the majority of jobs that have been created have been part-time jobs in low-wage sectors.

In addition, the report states, “Today, there are nearly two million fewer jobs in mid- and higher-wage industries than there were before the recession took hold, while there are 1.85 million more jobs in lower-wage industries.”

Yet the National Center for Education Statistics estimates that nearly 3.8 million students will graduate this year, ranging from associate’s to doctorate degrees.

Just from these two statistics, there is clearly a shortage of jobs being created for the number of students that are graduating.

This is not taking into account the 9 million people who are already unemployed, the 2.9 million who are long-term unemployed or the 7 million people who are underemployed.

With what funds will graduates repay their student loans if there is a shortage of jobs available to provide them the income to repay their debt?

Even though students and the economy are struggling, business is booming.

The Economic Policy Institute stated, “[corporate] profit margins are at their highest levels since the 1960s and show little signs of having peaked.”

In search of higher profit margins, many multinational corporations have relocated jobs overseas at the expense of college graduates, and ultimately the economy.

By minimizing costs, corporate executives and stockholders make more money.

Due to tax breaks to multinational corporations and billionaires, tuition has been increasing as state funding for higher education has been diminishing.

There has been no “economic recovery” since the financial crisis and there will be no economic growth as long as our generation of students is crippled by debt.