40% of College Graduates Have "Unmanageable Debt Level"

The average student borrower now graduates with $27,600 of debt, almost three and a half times what it was a decade ago. 84 percent of black students and 66 percent of Latino students graduate with debt. And 39 percent of all student borrowers graduate with unmanageable levels of debt, according to the Department of Education.

Add to that young people's average credit card debt of over $4,000. Set aside your stereotypes of irresponsible youth: Over 70 percent of undergraduates use credit cards to buy school supplies, food and textbooks. 24 percent use their credit cards for tuition. Credit card companies are becoming the high-interest student loan industry of last resort. When it's all totaled up, young people spend 25 percent of every dollar earned on paying off debts and loans.

Federal policy isn't keeping pace with reality. Soaring education costs and inflation have not been met with aid increases. Caps on federal student loans have forced students to seek private loans, which were up from $1.1 billion in 1995-96 to $10.6 billion in 2003-04.These loans have much higher, often predatory, interest rates.

Today, the average Pell Grant covers only 40 percent of college tuition, compared to 77 percent 25 years ago. And under President Bush, the Department of Education revised Pell Grant eligibility guidelines, effectively excluding almost 100,000 young people from the program and reducing grant money for another 1.2 million.

The war on the middle class continues. College it is a ticket to indentured servitude.

Students are graduating with huge debt bills because state legislators have decided supplementing higher education is no longer important.

Let’s look at this from a timeline perspective. Student X graduates college with $27,600 — the average amount of graduate debt. Now student X decides he wants to become a doctor. There’s another 7 years of debt. Law school? – another three years of debt. Several people who I went to law school with were near $100,000 at graduation. How can these people even think about saving any money?

Here’s something else to think about: this level of debt discourages people from pursuing careers in lower income professions such as teaching. What’s the point in being a teacher if your salary won’t pay for the education you got to become a teacher?

How about this: by starting people into the world of debt at an early age, we are now encouraging people to take on ungodly levels of debt throughout their life. Debt is now OK – regardless of the level. College is now a debt trap.
Permalink by Hale Stewart

Anyone notice the minorities have the highes ratio? And then wonder why we don't continue our higher education in profesional schools and stuff. It's easier said than done especially when we're expected to be working or studying poor for 6-10 years min just while in school not counting the post school period. I think this also explains the expanding gap between rich and poor. Those that make it even with the debt and those that choose to live within there means or need to tend to more immediate matters such as family or other things. This really needs to be changed but how?

B-anal? or Banal?

lazy so copy and pasting

MISCELLANEOUS EZRA BLOGGING....I've always pronounced "banal" so that it rhymes with "anal." Thus I'm crushed to find out from Ezra that I'm in the minority: among the experts on the American Heritage Usage Panel, only 38% prefer that pronunciation, compared to 46% who prefer the pronunciation that rhymes with "canal." I've always considered that hopelessly pretentious. I wonder if it's an East coast/West coast thing?

But I still have a question for Ezra: how could you and a friend have gotten into even a "meaningless dispute" over this? It only takes a few seconds to look it up.

On a related Ezra note, sign me up as a Christmas carol lover. Actually, that's an unrelated note, isn't it? Either way, I love Christmas carols, especially classic tunes — anything written after 1900 is suspect in my book. For the perfect rendition of a classic carol, check out Amy Grant's version of "Hark! The Herald Angels Sing." Great stuff.

—Kevin Drum 1:53 PM Permalink | TrackBack (0) | Comments (111)

IMMIGRATION....In a few days I'll go to the polls to vote in a special election for the congressional seat vacated by Chris Cox, who was confirmed as head of the SEC last July. We've got the usual Republican and Democratic candidates on the ballot, of course, but we've also got an American Independent candidate: Jim Gilchrist, founder of The Minutemen, a group that became briefly famous earlier this year by heading down to the Arizona border with lawn chairs in tow to prevent the United States from being "devoured and plundered by the menace of tens of millions of invading illegal aliens."

Did it work? As a PR exercise it worked great, and although the Minutemen themselves didn't accomplish much, the pressure they've put on the Border Patrol for the past year seems to have paid off: vegetable growers say they're likely to get only 22,000 workers for their fields this year, compared to the 54,000 they need. Tom Nassif, president of the Western Growers Association, explains why:

"There are just some jobs people don't want to do," Nassif said. "It's the most developed nation in the world using a foreign workforce, and people need to recognize that. We need to make them legal."

Jack Vessey [who runs a vegetable farm near El Centro] said he listed openings for 300 laborers at the state office of employment last week to prepare the lettuce fields for harvest. "We got one person," he said. "He showed up and said, 'I'm not going to do that.' "

Now that's an odd thing, isn't it? Immigration foes like Gilchrist insist that if we only cut down on the supply of Mexican farm workers, wages and benefits would go up and plenty of Americans would be available for harvesting our leafy greens. And yet, despite this year's severe shortage of Mexican labor, Vessey is apparently offering the same backbreaking work, brutal conditions, low pay, and nonexistent benefits that he always has. Likewise, Ed Curry, a chili farmer who has given up on employing legal workers because the H2A program has "too many snafus," says only that he would be willing to pay legal workers "a bit more" than he does now.

Is this reluctance to increase wages caused by a fear that higher labor costs would make their produce too expensive to sell? On its face, that seems unlikely. Even a whopping 40% increase in farm wages would increase the wholesale cost of produce by only about 10%. But a shortage caused by letting crops go unharvested would surely have the same effect — and supermarkets would continue to buy.

That's not to say that foreign competition isn't a real issue for California farmers. It is. Still, the lesson from this natural experiment along the Arizona border seems pretty clear: farmers are flatly unwilling to pay their workers more. Whether that's because it would price their produce out of the market or because even a big wage increase wouldn't attract enough legal workers hardly matters. The evidence indicates that farmers would rather let their crops rot in the field than pay ten bucks an hour.

In other words, Gilchrist and his nativist ilk are barking up the wrong tree. What we need isn't a bunch of yahoos dotting the border with their lawn chairs and cell phones. Instead, we need to recognize that — like it or not — Americans very clearly want and rely on immigrant labor. The key, then, is not to eliminate it, but to figure out a rational way of limiting illegal immigration without simultaneously demonizing immigrants themselves. This might include programs that make it harder to cross the border illegally, but only if we also provide legal status to many more immigrants than we do now.

This combination — easier legal immigration paired with tougher illegal immigration — would provide immigrants with a greater incentive to try the legal route instead of the all-too-deadly "season of death" route. It would also provide us with the pool of immigrant labor we obviously want, increase immigrant wages, and cut down on the abuse they suffer from employers who know how easily they can be blackmailed.

Seems like it would be worth a try.

—Kevin Drum