Student loan debt has just crossed 1.5 trillion dollars and not nearly enough people are pissed off about it. Cost of going to college is skyrocketing and debt is rising at an unsustainable pace. Just like our national debt, the bubble is going to burst and it’s going to be a brutal reality hit for all of us.
The government uses taxpayer dollars to loan almost any full-time student an unsubsidized loan regardless of major, academic record, credit score or financial status. Not every student takes that loan but an unsubsidized loan is available to pretty much anyone. The problem is when the government steps in and covers the difference in cost for every student, colleges can charge whatever they want. The administrations can expand rapidly without restraint or regard for cost because students are willing to pay whatever it takes to go to college.
When giving loans to students, two components that need to be taken into consideration are choice of major and academic record. These are two of the biggest determinants of whether the student will be able to pay the loan back. If a competent student is majoring in something with a low unemployment rate and high median salary, there is a good chance they will get a job and be able to afford to pay the loan back in the foreseeable future.
This is particularly pertinent when the state is subsidizing or backing student loans. I do not believe the government should be in the business of giving out student loans on the taxpayer dime since we are 21 trillion in the hole and government sucks at everything. It is probably better to let the private sector figure this one out.
But, if the government is going to get involved, they are completely irresponsible to give loans to people who will likely not be able to pay them back. The Education Department announced last year that default rates have started increasing again and currently hover around 11.5 percent. This rate happens to be around the same level as the mortgage delinquency rate was when the rate peaked in 2010.
The government tires to justify these loan programs when there is an economic benefit to society to give educational opportunities to students. This is a somewhat valid argument when there is a market or societal demand for workers with certain majors.
This would change slightly over time as the needs of the market change, but in general, there is a need for students majoring in education, business, accounting, finance, science, engineering, healthcare, and a few others that actually have a place in the labor market.
If Buzzfeed hires people in your major then you probably do not have a general market appeal. Also, if you are still unsure what I mean by majors with a general market appeal, then my tax dollars probably shouldn’t be gambled on you. That is not to say that all people in trash majors will fail. They simply will not succeed because of their major. They can still succeed with hard work and other qualities that are valued by people that sign paychecks.
Culturally, we need to value market worth rather than level of education. Plumbing may not be a glorious profession but plumbers have actual worth in the labor market. Doctorates in gender studies or absolutely worthless crap majors have the same value of a high school diploma. Not only is the degree worthless, they probably hate America and are typically very painful to talk to (See Trigglypuff or basically any other radical SJW). All the more reason to stop covering their indoctrination costs.
Cultural changes like this would put trade school graduates above people in fake majors. Between an electrician and someone spending 100 grand on an American Studies degree, we already know who is smarter. It is time to publicly acknowledge it.
We can also not forgive 1.5 trillion dollars in loans. This gets rid of the economic cost of taking on a stupid loan. So, not only do creditors and taxpayers get screwed with the bill, people do not learn that they should not take on loans that they will never be able to pay back. 2008 was not that long ago but apparently, people already forgot.