For our parents’ generation, higher education came with the promise of gainful employment, career advancement, and upward mobility.
Sadly, in today’s economy it seems like a college degree only comes with one guarantee –Â insurmountable student debt.
It is estimated that some 40 million Americans owe more than $1.2 trillion in student debt. I am one of them. At age 33, having been out of school for more than five years, I am still carrying more than $100,000 in debt from my undergraduate and graduate degrees.
[Related: [Watch] A Conversation With Millennials About Student Loan Debt Solutions]
I worked to help make ends meet during my college years. I held jobs at a supermarket, a movie theater, and later worked on campus. I stocked shelves, bagged groceries, and sold a lot of popcorn, but it wasn’t enough. Federal loans did not suffice either; and with the stupefying cost of tuition, housing, and books, how could it be? Now, I continue to chip away at my six-figure debt –Â much of which is from private lenders with variable rates that fluctuate from month to month. Â Because private lenders write their own rules, often my payments barely make a dent.
My wife, a successful dentist, is also working to repay significant loans. Together, we estimate it will take the better part of the next decade to dig ourselves out of this hole. While carrying this substantial burden of student loan debt, we are raising a family, saving for our daughter’s education, running a business, and trying to save for retirement,
This is the new normal, and you don’t need a degree in economics to realize the widespread impact it will have on our nation. More and more millennials, like us, are forgoing buying homes, buying new cars, and other major expenditures because of student debt. Is there any doubt that our dollars would be better spent on investments in the economy?
Don’t get me wrong. I value my higher education. I empathize with our colleges and universities. They have weathered significant cuts on both the state and federal levels over the years, but we cannot bury our heads in the sand while continuing to pass the burden on to students. We have to restore state and federal funding for higher education to help institutions lower costs for students. State legislatures need to lead on this issue. We must work together to find innovative solutions for students and families. The system is broken and it is now time for some fundamental changes in the way it operates.
First, when it comes to income, all degrees are not created equal. Public universities should consider adjusting tuition based on the Return of Investment models for various degrees. For instance, the average first-year salary for a student majoring in education is $36,000. For engineering, it is estimated that they will make $52,000. Tuition costs should reflect this disparity.
We also need to consider expanding loan forgiveness programs for employees in public sector fields. Asking them to wait a decade is hardly an incentive when some of these loans can be forgiven at the beginning of their careers, with the understanding that they will remain in service.
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