Wednesday, April 25, 2012

Guest Post Looming Debt, Little Hope

Editor's Note: We're honored to bring you the following guest post from June Smith

I can imagine Ron ranting about this as he did so many times: Because of the anemic labor market, half of the recent U.S. college graduates are either without jobs or in jobs that don’t utilize their skills and their expensive liberal arts educations, or justify their exhorbitant student loans. They are lucky to find jobs that require a high school diploma or G.E.D.

How many times did Ron say that in between being a barista, parking cars, or delivering pizzas earning just above minimum wage, the average recent college grad spends a couple of hours a day online looking for a job more suitable for someone with a B.A. degree and huge student loans? The jobs just aren’t there.

The average student loan debt is $25,000 but Maryland tops that by several thousand dollars.  Entry level jobs have been eliminated and the age of the “assistant manager” is a thing of the past. But the debts must be paid. Student loan debt now tops a trillion dollars—increased more than 500% since 1999.

President Obama is urging our elected officials to keep the student loan rates at the current level of 3.4%, before by law, they double on July first. According to a White House spokesperson, “The rate change would affect an estimated 7.4 million students, who would each see an additional $1,000 in debt per year at the higher rates.”

Being immersed in debt before ever earning a paycheck is, as Ron would say, “an unintended consequence.” Up until recent years, a college degree had always been a fast track to a high paying job, a fancy wedding, nice cars, maybe a boat, and manageable debt. But those days are over, just like the dot com days.

Now, college grads are not only bouncing back home to live with dear old mom and dad, they are asking for their help to pay off student loans just months after they’ve paid the final tuition payment.
Whose idea was it to shell out what money was on hand and augment it with financial aid? Ever increasing tuitions and fewer job opportunities isn’t breaking news. Thus, the hope and dream of sending a child to college has turned into a nightmare for millions of families.

The President said, “We should be doing everything we can to put higher education within reach for every American — because at a time when the unemployment rate for Americans with at least a college degree is about half the national average, it’s never been more important. But here’s the thing: it’s also never been more expensive.”

That last sentence may be the only truthful thing I’ve ever heard him say.

Based on information from the College Board's Trends in College Pricing, “the 2011-2012 average total costs (including tuition, fees, room and board) were $17,131 for students attending four-year public colleges and universities in-state and $29,657 out-of-state, and $38,589 for students at four-year private colleges and universities.”

Parents and students are advised to set aside “an additional $4,000 for textbooks, supplies, transportation and other expenses”.

According to www.Finaid.org’s College Cost Projector, “college costs increase at about twice the inflation rate. Current increases have averaged 5% to 8%” per year.  Their user-friendly cost projector, found just below the Discover® Card ad for student loans with no payments until graduation and a 2% graduation reward click-here option, bases estimates on a 7% tuition inflation rate.
Is it any wonder that college graduates who majored in anthropology, art history, any of the humanities, philosophy or zoology can’t find jobs in their chosen fields?

One doesn’t need to master the academic disciplines of anthropology or art history or the humanities to understand the origins, nature and destiny of human beings in today’s world.
Studying Aristotle, Plato, and Kant can’t help solve the problems this nation is facing although an understanding of the basics of Zoology may be helpful if applied to researching and revealing the habits and comparative actions of yellow dog Democrats.   

Luckier classmates choose nursing and teaching and accounting, time honored occupations although many of us weren’t happy with the results of 2011 tax preparations, but that’s no reason to shoot the messenger.

Here’s a little gem Ron would have loved: A Middle Tennessee State University student with mounting student debt recently met with a career counselor whose main advice was “Pursue further education.” More “boowah, bushway, hoo-ha, blah blah” thinking from someone who has a job, health care coverage, and other benefits.

The government is betting on better job growth and an increase in the labor market they expect will be boosted by an aging population in need of in-home care, nursing aides, and/or companions.
They’re so sure of their bet that they want to double the current student loan rate.

I’m betting there will be even more baristas, waiters, waitresses and fast-food employees with a B.A. degree that’s not worth much more than the cost of the parchment paper, gold foil seal and leather case they received it in on graduation day.

For now, we’ll have to wait for the “River” card and the final round of betting to officially begin in this “hold em” game—and hope they hold back the increase of student loan rates. 



June Ray Smith
Mrs. Smith is the widow of WBAL show host and Sun columnist, Ron Smith. Her website is www.FriendsofRonSmith.com.

3 comments:

Duane Keenan said...

Welcome June, it a pleasure to have you!

You said "The government is betting on better job growth and an increase in the labor market they expect will be boosted by an aging population in need of in-home care, nursing aides, and/or companions".

Of course, the aging population will increasingly not be able to afford all this help, so they will do without. Certainly ObamaCare and (if it still exists) private insurance won't be able to pay the costs either. The few taxpayers left will not be able to either.

Chester Peake said...
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Chester Peake said...
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