College debt accumulated by recent graduates is continuing to affect those graduates and the economy. Graduates are living in the basements of their parents’ homes with debt loads in excess of $50,000. These are not medical students, but rather graduates of liberal arts and other colleges. Beginning a professional life with a significant debt load is a personal disadvantage for these individuals, a professional problem for industries and a consumer problem for businesses.
There is an old saying that says history is the most important subject because if you don’t know where you’ve been, then you don’t know where you’re going. Most senior professionals acquired their college educations for amounts consistent with the earning power of minimum wage jobs, summer jobs and modest lifestyles.
College buildings were relatively modest affairs, and athletic departments were not separate, stand-alone, billion-dollar businesses but part of academic programs. The menu didn’t include $50,000 bonuses for coaches for showing up at games. Buildings were modest affairs and the minimal necessary housing was provided to students.
Today’s college buildings are sumptuous affairs that look like Class A office buildings rather than educational institutions. Athletic departments have become de facto minor league sports teams that feed their top athletes to the majors for multimillion-dollar contracts. Education executives are making comfortable mid six-digit incomes.
The modern education complex has morphed into a business. Its income is based on loans that students take out to pay for these lavish buildings and lifestyles. Tuition has skyrocketed beyond the ability of students to pay as they go, and therefore education is limited to those who are willing to take out loans or those whose family or economic situation provides the financing. This modern education complex focuses on teenagers whose ability to understand the implications of this debt load has not yet fully developed.
While the institutions bear a substantial amount of the responsibility for this, the students themselves cannot be entirely excused. The affluence of the last decade has to a significant extent been made possible by the accumulation of debt in exchange for material goods. This generation of college students has grown up in that environment – one in which the accumulation of debt is not something avoided, but used as leverage for an affluent lifestyle.
It is never possible to turn the clock back to the good old days, and oftentimes the good old days really weren’t that good. It’s essential to understand that a college education is useful, but it’s not the only option to a better life. While it is clear that a college education is an asset, there are many success stories of people without college degrees (see Bill Gates).
Students need to assess whether the accumulation of significant debt is a fair trade-off for a college education. The education complex must reassess its business model. When the debt capacity of the student (their market) is exhausted, there will be a painful retrenchment.
There is no question that a highly skilled workforce is essential to a vibrant economy. Leadership in either government or industry is often evidenced by academic prowess. The institutions of higher learning must refocus themselves on meeting the educational needs of our young adults and our economy. Our young adults must be counseled to be more discriminating in their choice and purchase of educational products, much as they are discriminating in their purchase of other consumer goods.
Christian Steinbrecher is president of Columbia River Port Engineers Inc. and the immediate past president of the Oregon Section of the American Society of Civil Engineers. He is the editor of ASCE Oregon’s Report Card on Oregon’s Infrastructure. Contact him at cfs@carpengrs@.com.