It was announced last summer that total student loan debt, at $830 billion, now exceeds total US credit card debt, itself bloated to the bubble level of $827 billion. And student loan debt is growing at the rate of $90 billion a year.
There are far fewer students than there are credit card holders. Could there be a student debt bubble at a time when college graduates’ jobs and earnings prospects are as gloomy as they have been at any time since the Great Depression?
The data indicate that today’s students are saddled with a burden similar to the one currently borne by their parents. Most of these parents have experienced decades of stagnating wages, and have only one asset, home equity. The housing meltdown has caused that resource either to disappear or to turn into a punishing debt load. The younger generation too appears to have mortgaged its future earnings in the form of student loan debt.
The most recent complete statistics cover 2008, when debt was held by 62 % of students from public universities, 72 % from private nonprofit schools, and a whopping 96 % from private for-profit (“proprietary”) schools.
There are far fewer students than there are credit card holders. Could there be a student debt bubble at a time when college graduates’ jobs and earnings prospects are as gloomy as they have been at any time since the Great Depression?
The data indicate that today’s students are saddled with a burden similar to the one currently borne by their parents. Most of these parents have experienced decades of stagnating wages, and have only one asset, home equity. The housing meltdown has caused that resource either to disappear or to turn into a punishing debt load. The younger generation too appears to have mortgaged its future earnings in the form of student loan debt.
The most recent complete statistics cover 2008, when debt was held by 62 % of students from public universities, 72 % from private nonprofit schools, and a whopping 96 % from private for-profit (“proprietary”) schools.
(...)
The student loan debt bubble signals a generation that enters the work of paid work cursed with what is more likely than not to be a life of permanent indebtedness and low wages.
Both recent trends and the most informed projections for the future of the labor market reveal that most of the current cohort of indebted students will face earnings prospects far poorer than what job seekers could expect during the period of the longest wave of sustained economic growth and the highest wages in US history, 1949-1973. The present generation will experience the indefinite extension of Reagan-to-Obama low wage neoliberalism.
According to the National Association of Colleges and Employers more than 50 % of all 2007 college graduates who had applied for a job had received an offer by graduation day. In 2008, that percentage tumbled to 26 percent, and to less than 20 % in 2009. And a college education has been producing diminishing returns. For while a college degree does tend to correlate with a relatively high income, during the last eight to ten years the median income of highly educated Americans has been declining.
Both recent trends and the most informed projections for the future of the labor market reveal that most of the current cohort of indebted students will face earnings prospects far poorer than what job seekers could expect during the period of the longest wave of sustained economic growth and the highest wages in US history, 1949-1973. The present generation will experience the indefinite extension of Reagan-to-Obama low wage neoliberalism.
According to the National Association of Colleges and Employers more than 50 % of all 2007 college graduates who had applied for a job had received an offer by graduation day. In 2008, that percentage tumbled to 26 percent, and to less than 20 % in 2009. And a college education has been producing diminishing returns. For while a college degree does tend to correlate with a relatively high income, during the last eight to ten years the median income of highly educated Americans has been declining.
No comments:
Post a Comment