Wait, we don't have a student debt crisis?

Do we not have a student debt crisis? That's what The Atlantic's Derek Thompson says.

Attention: The Consumer Financial Protection Bureau wants you.

This week they called for consumers' suggestions for policies to ease repayment of student loans, which they say are preventing young borrowers from climbing the economic ladder. Last year, for the first time, the amount of student loans taken out passed the $100 billion mark. And this year, also for the first time, total outstanding student loans will exceed $1 trillion. That's more than the entire American population owes on credit cards. This is a crisis, right? Well, the Atlantic Monthly begs to differ. They argue that the numbers tell a very different story -- a story they illustrate with an infographic in the March issue of the magazine. Derek Thompson is a business editor for The Atlantic.

"So the sticker price of lots of school is $50,000-60,000 a year. I think one year at Harvard right now costs about $57,000, which is right in line with a lot of these elite, private institutions. But that's the sticker price and not a lot of people end of paying the sticker price. In fact, I think the average costs of these schools is much closer to $20,000 even after you include all the various amenities and the costs of living. What we wanted to look at was, OK, we know that people are afraid of this student debt crisis and that the number is especially big because in the recession a lot of kids went back to school and so student debt continued to rise. But when you look at exactly what students are getting in exchange for their debt. It does seem like a pretty good bet, especially when you compare it to all sorts of other investments that you can make with money," says Thompson.

 Thompson says he doesn't want to downplay the huge amount of money that students pay to attend college. Of course, education is expensive, but he notes that students do have a long time to pay back the money. "Getting student debt, essentially investing in an education, does tend to pay off down the line in higher wages, which you can use to pay off the student debt that you've acquired," says Thompson.

Forty-three percent of students owe $1,000-$10,000 after graduating, but tuitions are rising. At what point is the student loan too burdensome?

"One fact that I would look at is what economists call the college premium. You can basically think of it is as the bonus that you should expect to get from going to college. That college premium has stayed pretty strong throughout the recession and throughout the last 10 years," says Thompson.

And what about parents who are bankrupting themselves to pay off their kids' student loans? Instead of facing a student aid crisis, could we be facing a middle class collapse crisis?

"The thing that a lot of economists say is where do you start to fix the middle class crisis? You start with giving the middle class  more skills. You start with improving what they call the human capital of the middle class. You give them the capacity to start their own jobs and be smarter and more clever and skilled in the jobs that they're working in. And I don't know the best way to do that, except to say that we seem to have a college system that, for all of its faults, is still the envy of the world," says Thompson.




About the author

In more than 20 years in public radio, Barbara Bogaev has served as the longtime guest host of NPR’s flagship program Fresh Air with Terry Gross, as well as host of APM’s news and culture magazine, Weekend America and the weekly national documentary series, Soundprint.
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1. Your education loan alleviation calculate was unable therefore interest levels can two times. Lots of people have got stop seeking to repay their particular financial products since they can not pay for to cover them in addition to give themselves simultaneously. Normally it takes around 90 days to have the item make an appearance using a credit report and many are generally using mom and dad lower together on their Mother or father As well as financial products. Low in addition to behold Parent, Cousin as well as Uncle can not genuinely help you both. Passing up obligations on a single fill in order to make additional obligations is not going to work both.

2. Even if you then have a higher degree with all the suitable skills isn't going to signify business an individual sent applications for can use an individual -- they may be getting a lot more STALK dangerous individuals than People in america. Actually Showmanship is performing this kind of. Precisely why use the National when it's possible to use a person who's going to be happy for 50 % your pay out with no advantages? Established requirements impossibly large, next whine you can not find a certified "American" for that job. You will want to perform tale on this? There is obviously any good supply in the Amnesty costs allowing all the more dangerous individuals (currently 38. 8 MIL are generally below now) in to the YOU.

3. Obvious trolling can be suffocating creativity in addition to creation. We retain hunting by means of obvious application techniques and possess observed Could not pay the $15, 000 + expected exclusively for any provisional obvious! However I could truthfully be sued for millions by means of a person which is not going to deliver an item to advertise which holds any obvious therefore largely described it would be viewed for almost anything at all.

4. People that can not come across tasks have got run to your army branches! Just attempt to get a recruiter in order to call up an individual rear just a month, never mind weekly. They've got are more fussy with regards to fresh recruits because they are a great number of in order to chose through at this point.

5. Not any legislation by any means of what interest levels banking companies can charge. I've truly seen students kicked out by means of their particular mom and dad signing up for financial products having fascination up to 27%! Pupils haven't any option upon financial products while actually contentment (including Societal Protection in addition to Disability) is usually garnished to cover these kinds of financial products. Pupils haven't any protection under the law both. Many people pay out upwards as well as acquire credit score bull dozed even when there're doing the job 2 minimum salary tasks only to take in addition to retain any top above their particular brains. Numerous individual lenders don't offer deferment, charge interest levels with 8% and up while scholar can be signed up for college, with no for a longer time delay settlement (used to become 6 months to a year) even when your scholar does not have any earnings.

6. Strain induced medical problems. Thought financial debt seemed to be awful? Why not consider owing 100K in addition to finding that your livelihood will be mailed in another country in which you aren't going to encouraged as well as the job marketplaces are generally more challenging as opposed to YOU? Prepare for your quality of life to consider any nose jump doing the job those unusual, dangerous tasks that offer not any health insurance. Your own take-home pay will be as well little to cover everything therefore get used to getting even worse off of than you are before going in order to college.

7. Not any investment decision inside knowledge. Funding for degree might have cut your head off of this kind of creature but some simpleton made a decision that individuals in this particular state are only below in order to bail out banking companies in addition to make sure they are rich. We paid out increased place a burden on for CEOs yet mess folks who really develop tasks in this particular state should the option wasn't taken from their website with the rich contentment bloodsuckers in this particular state.

8. Scholarships, awards in addition to "financial aid" are only for that extra inadequate, unlawful immigrants as well as your minorities. In case you are simply just inadequate, white-colored and even reduce middle class you'll receive ZERO financial aid, awards as well as be eligible for a scholarship grants. We discovered just racist scholarship grants stating your applicant may not be regarded as unless of course your had been black color as well as hispanic -- as well as which inclination can be proven to which skin tone color/ethnicity. There was clearly not any MERIT-Based scholarship grants with the schools We moved straight into in addition to outside of. ACTUALLY ZERO. Your financial aid they pressed upon with regards to can be nonexistent. What college seemed to be they speaking about? We have no idea of anyone with simply just 20K inside education loan debts unless of course many people decided not to finish off making their particular degree. Numerous haven't any choice yet to function therefore the youngsters from the rich curently have yet another leg through to them. Just how long is it possible to work 30 hrs weekly in addition to carry out 58 hrs involving class use not any days off of?

9. Limited as well as nonexistent settlement options. You'll be able to pay out at a rate you can not pay for right this moment when you haven't any job OR you can pay out with a better rate that could depart an individual homeless. Creditors additionally retain ratcheting upwards fascination upon financial products to the stage the item gets impossible to settle. In the end your scholar can stop spending. Persons can easily simply carry much trouble prior to they have got plenty of and many will certainly bankruptcy courtroom wanting to verify are going to homeless because they can not find a job that could both equally give them as well as the greedy lenders.

10. Dropped wages/earnings/investments through these kinds of students due to predatory lenders can injure your financial system a whole lot worse than unlawful immigration in addition to dangerous individuals. Dollars siphoned from any consumerist financial system by means of those delivering cash out of the state and the ones which are certainly not retaining it's going to injure purchasing electrical power all round in the usa. When jr . can not pay for a home in addition to rents the complete living he will have got minor value as well as internet worthy of to exhibit correctly. Not any fresh as well as used car, not any young children, not any retirement life nest egg cell so this means your contentment software programs now we have blocked will be drowning in debt.


Whenever they had been to really bother meeting with these kinds of students they would come across the unappealing real truth. School degrees in the usa are certainly not worthwhile. Employers would like temperature workers, commitment simply, not any advantages, not any overtime pay out, and extremely confined protection under the law. Ralph Perry can be prospecting corporations ahead in order to Colorado front range since they wages below are actually frustrated by means of unlawful immigrants in addition to dangerous individuals. Don't believe myself? We have towns in which not a soul talks English in addition to 24% (too low a number during my opinion) involving individuals are generally uninsured. Survival prices are generally rising in order to unsustainable costs with no one particular would like to admit here is the future bubble in order to burst open. Your riots in the usa is likely to make those inside Europe resemble any cakewalk if the Screwed Age group usually takes concerns inside their own palms.

11. Schools don't use students upon job shopping, prospecting business employers, and even make known your RETURN their particular degree can pay for them.
This can be by means of in addition to considerably most significant issues aside from not any financial aid. You'll be able to have a stupid character analyze yet any time searching for which elementary job you're all on your own. You'd probably imagine any college would like to boast with regards to their particular scholar use rate yet the truth is they may be presently there only reserved for your own personal loan cash. There is absolutely no penalty for making a lot more folks who will be determined by contentment in this particular state.

The bottom line is which YOU corporations would like no cost labour through experienced workers without any over head expense. This product can not past for a long time.

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This guy obviously has no clue what's going on and I'll gladly enlighten NPR with a reality check.

1. The student loan relief measure failed so interest rates will double. Too many people have quit trying to repay their loans because they can't afford to pay them and feed themselves at the same time. It can take up to 90 days to have it show up on a credit report and some are taking parents down with them on their Parent Plus loans. Low and behold Mom and Dad, Aunt or Uncle can't really help you either. Skipping payments on one load in order to make other payments is not going to work either.

2. Just because you have a more advanced degree with all the right qualifications doesn't mean that company you applied for will hire you - they're hiring more STEM foreign workers than Americans. Even Hollywood is doing this. Why hire an American when you can hire someone who is happy for half the pay and no benefits? Set up requirements impossibly high, then whine you can't find a qualified "American" for the job. Why not do a story on this? There's even a provision in the Amnesty bill to allow even more foreign workers (currently 42.8 MILLION are here now) into the US.

3. Patent trolling is suffocating innovation and invention. I keep looking through patent application processes and have found I can't afford the $15,000 + required just for a provisional patent! Yet I could be sued for millions by someone who won't bring a product to market who holds a patent so broadly defined it could be interpreted for just about anything.

4. People who can't find jobs have run to the military branches! Just try to get a recruiter to call you back within a month, never mind a week. They've become more picky about new recruits because they are so many to chose from now.

5. No regulation at all on what interest rates banks can charge. I've seen students kicked out by their parents taking on loans with interest as high as 27%! Students have no recourse on loans as even welfare (including Social Security and Disability) can be garnished to pay for these loans. Students have no rights either. They pay up or get their credit score demolished even if they are working two minimum wage jobs just to eat and keep a roof over their heads. Many private lenders don't offer deferment, charge interest rates at 8% or more while the student is enrolled in college, and no longer defer payment (used to be 6 months to a year) even if the student has no income.

6. Stress induced health problems. Thought credit card debt was bad? What about owing 100K and finding that your job is being shipped overseas where you aren't welcome and the job markets are tougher than the US? Get ready for your health to take a nose dive working those odd, dangerous jobs that offer no health insurance. Your paycheck will be too small to cover everything so get used to being worse off than you were before going to college.

7. No investment in education. Funding for higher education could have cut the head off this monster but some idiot decided that people in this country are just here to bail out banks and make them rich. I paid higher tax for CEOs but screw the people who would actually create jobs in this country if the opportunity wasn't stolen from them by the rich welfare parasites in this country.

8. Scholarships, grants and "financial aid" are only for the very very poor, illegal immigrants or the minorities. If you're just poor, white or even lower middle class you will get NO financial aid, grants or qualify for scholarships. I saw nothing but racist scholarships stating the applicant would not be considered unless the were black or hispanic - or that preference would be shown to that skin color/ethnicity. There were no MERIT-Based scholarships at the colleges I transferred into and out of. ZERO. The financial aid he pressed on about is nonexistent. What college was he referring to? I don't know anyone with just 20K in student loan debt unless they didn't finish earning their degree. Many have no choice but to work so the children of the rich already have another leg up on them. How long can you work 30 hrs a week and do 60 hours of class work with no days off?

9. Limited or nonexistent repayment options. You can pay at a rate you can't afford right now as you have no job OR you can pay at a much higher rate that will leave you homeless. Lenders also keep ratcheting up interest on loans to the point it becomes impossible to pay off. Sooner or later the student will quit paying. People can only take so much hardship before they've had enough and some are going to bankruptcy court ready to prove they'll be homeless as they can't find a job that will both feed them and the greedy lenders.

10. Lost wages/earnings/investments from these students due to predatory lenders will hurt the economy even worse than illegal immigration and foreign workers. Money siphoned off of a consumerist economy by those sending money out of the country and those who aren't keeping it will hurt buying power overall in the US. If junior can't afford a home and rents his entire life he'll have little equity or net worth to show for it. No new or used car, no kids, no retirement nest egg which means the welfare programs we have now strained will be drowning in the red.

If they were to actually bother interviewing these students they'd find an ugly truth. College degrees in the US aren't worth it. Employers want temp employees, contract only, no benefits, no overtime pay, and very limited rights. Rick Perry is recruiting companies to come to Texas because they wages here have been depressed by illegal immigrants and foreign workers. Don't believe me? We have cities where no one speaks English and 24% (too low a number in my opinion) of workers are uninsured. Welfare costs are rising to unsustainable rates and no one wants to admit this is the next bubble to burst. The riots in the US will make those in Europe look like a cakewalk when the Screwed Generation takes matters into their own hands.

11. Colleges don't work with students on job hunting, recruiting employers, or even disclose the ROI their degree will afford them.
This is by and far one of the biggest complaints aside from no financial aid. You can take a stupid personality test but when hunting for that entry level job you're on your own. You would think a college would want to boast about their student hire rate but the reality is they're there only for your loan money. There is no penalty for creating more people who will be dependent on welfare in this country.

The bottom line is that US companies want free labor from skilled employees with no overhead cost. This system can't last much longer.

People CHOSE to take on debt for college. They chose to go to overpriced schools. There are lots of good colleges that don't charge 50k a year. You can get scholorships with good grades, grants, and could save money befor going. You could also chose to put others first and join the mitary and get the National Guard or the GI Bill to pay for it.

The debt held by students is their choice, I'm sorry but I see this like those who get addicted to alcohol and drugs. It is sad and it would be nice if they could work it out, but I should not have to pay more taxes to help them avoid the consequences of their bad choices.

It would be better if we heard more about avoiding student debt than how because of that debt people can't afford to take out other debt.

The reality is that the 'average' college debt has now grown to over $26,000 (for the class of 2011). And I'd like to think that most people don't take on the liability for the heck of it.

Minimizing debt and maximizing value should always be a priority, but family finances do vary, especially when the cost of living is up (particularly for those with a healthcare/insurance burden), and we have a 'combination' of both sub-par employment and college costs at all time highs. Not everyone is going to join the military (even if government $$ could support that) or get big scholarships. So it's not surprising that many people must find alternative/supplemental funding, depending to some degree on what they think they need in an education.

I would like to see, though, more exploration of options, and how other programs can be recognized as equivalent to the 'holy grail' of a conventional degree.

Study that shows college grads make more is misleading and authors know it. Your smartest and most motivated kids go to college, doesn't necessarily mean that those same kids wouldn't have been successful if they hadn't attended. In order for the chart to actually mean what it implies, you'd have to compare to kids that were qualified for college, but instead went directly into work to their college graduated equivalents. Of course there is no data set to use because nearly every smart kid is told they need to go to college to be successful and given unlimited credit to do so. Also, there has been tremendous inflaiton in degrees, so now jobs that previously had been staffed with smart high school grads, employers set a bachelors as a minimum standard becase they're so plentiful and is an easy way to screen for good candates.

Anyone find it strange that in a discussion of the benefits of a 4-year college degree -- particularly in relation to the ' college premium' -- there was no mention of the fact that incomes for people with college degrees have remained stagnant since at least 2000?

What kind of economics is 'Market' Place trying to sell here?


I found it difficult to listen after the first few statements. The guest is not living in reality. Yes, some uncompetitive private schools may show a $50K a year sticker but offer so much in scholarships that the pricetag is half...but competitive schools (I'm not talking Ivy Leagues) are not. My son a highly competitive student, was accepted to most schools applied to but the end discussion revolved around the complex finances involved. He sadly settled for a highly rated in-state school (although not completely happily, and it's not really the best fit for him) because he/we could afford it. That said, it's still $20K a year. The competitive private schools he applied to...all begged poor, spending untold dollars chasing him after accepting him, but stating that their scholarship endowments had been decimated by the financial mess and couldn't offer as much as they would have in previous years. Nowhere near half as suggested by the guest. We were told he had been given their largest grants/scholarships, and were still left with $40K and up a year remaining. Ridiculous. This is the problem, noone will ever address these issues when the purported "experts" are so off-base in their public statements.


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