Diwate: Graduating into debt


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Opinion: Diwate 8/31

Varad Diwate

High-school students are encouraged to attend college and pursue their dreams. Yes, it is important to attend college for a better life and contribute to society, and I do not wish to argue college is not a good investment considering a pure economic view of return on investment. Instead, I want to put forth the point that college has been made into such a difficult choice that many students after high-school are content doing menial jobs.

President Barack Obama said in January’s State of the Union speech: “So let me put colleges and universities on notice — If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury — it’s an economic imperative that every family in America should be able to afford.”

Such a quote definitely gives a boost to our efforts to pursue a university degree. But there’s not much to cheer about. When college tuition is high and funds remains tight, higher-education seems to be a luxury. Has a college education actually become a luxury?

A recent Bloomberg report says that college tuition and fees have increased 1,120 percent since records began in 1978. According to ProjectOn-StudentDebt.org, a college graduate in 2010 carried an average student loan debt of $25,250. After two years, this figure may have reached a new high. Even 20 years ago, the cost of college was within the middle-class reach, and there was minimal student debt. Now, instead of graduating with new hope and enthusiasm of stepping out into the “real” professional world, college graduates are thinking of the total loan amount, along with interest and the ways to pay it all off.

Let’s get to the heart of the problem. In a completely capitalistic economy such as ours, education is a commodity which comes at a price. It is not assumed to be a responsibility of the state to educate a generation, as in several European countries. Instead, we have universities which provide assistance to the students for tuition and miscellaneous fees, such as an application fee, several types of facility fees, etc. An attempt is being made to charge students for every facility, which may not even be used by the student.

When you go to college, you buy a whole package, just like an all-inclusive vacation tour. The result -— students have an inflated semester bill (which can increase by several hundred dollars every year), textbooks, supplies and living expenses can also burn a hole in your wallet. In an economic doom period, students pay off college debt by using their own money and loans, instead of receiving financial help from parents.

We also have for-profit private universities which clearly function as corporate companies with growth projections and profits. An annual bill of a private university totals ludicrous amounts. Multiply this amount by four years, and you have an amount which can give sleepless nights to any middle-class, high-school student. It might be worthwhile to keep track of these private universities, as many of them receive tax-breaks and other federal benefits.

When students begin to piling on debt to attend college, it should surely send alarm bells ringing. In a gloomy economy, a college degree is just a pass to enter the gates of the job market. A fancy title after your name does not ensure you a job after graduation. But fortunately, There are a few steps students can take to keep their loans at a minimum.

There are always scholarships and grants (maybe a few you are eligible for) to take advantage of. It may become a bit hectic, but working part-time and studying can at least pay off living expenses. It is also important to be realistic about your job prospects according to your major. There is a general perception that only engineering and science majors can build a great career in the present scenario.

This does not mean you should not follow your passion or stay away from liberal arts, theater or music, it means you should give it your best at whatever you do. This seems to be the only way to make a great career in a field of your passion.

The reality is daunting as the federal student debt has crossed $1 trillion, plus all the private loans. Does the government really need to be giving out huge loans instead of working on lowering tuition? The moot question is — if the government can spend money on doling out unemployment benefits, why can it not spend to educate an aspiring generation and make it truly employable?

This is a question that only our policy makers can answer. Possibly.