2012 February 20 Monday
Student Debt In America Nearing $1 Trillion

The parasitism of higher education has become too expensive.

As outstanding student debt approaches $1 trillion, itís one more reason record-low interest rates arenít doing more to boost housing.

Really, we can't afford this. The increase in number of college degrees issued has done nothing to increase the supply of technically skilled workers.

The debt load has impacts in living standards. Younger folks (who also are less skilled than previous generations) can't afford houses any more.

The Fedís white paper said 9 percent of 29- to 34-year-olds got a first-time mortgage between 2009 and 2011, compared with 17 percent 10 years earlier.

Among the more educated student debt is too high to qualify for mortgages. Plus, the growing ranks of single women with babies is probably partly the result of high costs of family formation. Though changing demographics due to immigration is another cause.

LORAIN, Ohio ó It used to be called illegitimacy. Now it is the new normal. After steadily rising for five decades, the share of children born to unmarried women has crossed a threshold: more than half of births to American women under 30 occur outside marriage.

Single parenthood lowers living standards. We can't afford the higher education racket any more because we have too many other things going wrong. We need to start cutting costs to compensate for all that is going wrong.

Share |      By Randall Parker at 2012 February 20 06:22 PM  Education Costs


Comments
TimG said at February 20, 2012 8:15 PM:

Interestingly the two examples from the business week article of advanced degree holders who are financially unable to buy houses, are both single mothers. The pharmacist who make 125k but owes 110K should be relatively okay (although she graduated in 2008, so it would be interesting to know how much she has already paid down), but the lawyer who makes 45K and owes 120K, is in trouble.

Wolf-Dog said at February 21, 2012 12:40 AM:


Actually according to this article immigration and population growth in the US have slowed down considerably:
http://www.usatoday.com/news/nation/census/2011-01-06-us-population_N.htm

But the parasitism of education is also due to the lack of competition: university capacity has not increased as much as the population growth during the last 3 decades. Thus the college tuition increased exponentially to unreasonable levels. College teachers have FAR lower salaries in other countries.

This is why interactive computing will change education dramatically in the future. New PDF files will become animated and much more alive in a few years. There will be links to hundreds of examples and explanations at each paragraph. A tablet computer with a resolution of 2560x1600 will have access to entire libraries and the course pack files will be more valuable than a traditional lecture, since the explanation and illustration will be far clearer and more developed than the best lecturer.

Wolf-Dog said at February 21, 2012 12:42 AM:

Actually according to this article immigration and population growth in the US have slowed down considerably:
http://www.usatoday.com/news/nation/census/2011-01-06-us-population_N.htm

But the parasitism of education is also due to the lack of competition: university capacity has not increased as much as the population growth during the last 3 decades. Thus the college tuition increased exponentially to unreasonable levels. College teachers have FAR lower salaries in other countries.

This is why interactive computing will change education dramatically in the future. New PDF files will become animated and much more alive in a few years. There will be links to hundreds of examples and explanations at each paragraph. A tablet computer with a resolution of 2560x1600 will have access to entire libraries and the course pack files will be more valuable than a traditional lecture, since the explanation and illustration will be far clearer and more developed than the best lecturer.

Wolf-Dog said at February 21, 2012 12:43 AM:

But the parasitism of education is also due to the lack of competition: university capacity has not increased as much as the population growth during the last 3 decades. Thus the college tuition increased exponentially to unreasonable levels. College teachers have FAR lower salaries in other countries.

This is why interactive computing will change education dramatically in the future. New PDF files will become animated and much more alive in a few years. There will be links to hundreds of examples and explanations at each paragraph. A tablet computer with a resolution of 2560x1600 will have access to entire libraries and the course pack files will be more valuable than a traditional lecture, since the explanation and illustration will be far clearer and more developed than the best lecturer.

bbartlog said at February 21, 2012 5:39 PM:

The other question is ... who is holding this debt and how much of a government bailout are they going to be looking for when it turns out that even student loan debt isn't a bulletproof guarantee of repayment?
Seriously, even with the Fed pushing down interest rates, people can only carry so much debt. The banking sector might like to be able to sell even more debt-backed instruments but the actual ability and willingness to pay is a finite resource, which is pretty much fully tapped (see also: Greece).

Check it Out said at February 22, 2012 4:36 PM:

The government should provide free higher education as well as allow private colleges and universities to charge as elitists clubs. It's better to have both options like most countries in the rest of the world.

mike Quinlan said at March 2, 2012 8:02 AM:

If the price of houses has outstripped the earning capabilities of many younger workers, maybe we should be asking why, as opposed to decrying the so called capital waste represented by education spending.


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