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How Did We Get Into the (College) Debt Trap?
James G. Martin Center for Academic Renewal ^ | October 6, 2021 | George Leef

Posted on 10/07/2021 8:16:41 AM PDT by karpov

No one spoke of college students being trapped in debt until rather recently. Prior to the advent of federal student aid programs, college wasn’t expensive, few Americans regarded it as important to their lives, and what borrowing they did for it was through private institutions that were careful not to lend where they perceived too much risk.

If in, say, 1971, someone had forecast that in fifty years, students would owe well over a trillion dollars in debt and many would face ruined lives because of their borrowing for college, he’d have been laughed at.

So, how did we get where we are today?

In The Debt Trap, Wall Street Journal writer Josh Mitchell gives a detailed history of America’s experiment in using higher education as a mechanism for social problem solving. He also provides many personal stories to underscore the hardships that have befallen students due to our obsession with getting college credentials. Those narratives make the book worth reading.

Unfortunately, Mitchell uncritically accepts the “conventional wisdom” about postsecondary education that propelled influential politicians to believe that they could improve upon the country’s traditional laissez-faire approach to college. That “wisdom” centered on the idea that by subsidizing a certain kind of formal education (that is offered in colleges), the workforce would be elevated to greater productivity, with the biggest gains accruing to poorer people.

Thus, the economy would gain, while poverty and inequality were lessened. Few doubted that it would work. The key was more education.

But, before the onset of federal intervention to make college “accessible” to everyone, Americans were not undereducated. Much of their skill and knowledge, however, was acquired outside of classrooms—especially through on the job training and apprenticeships.

(Excerpt) Read more at jamesgmartin.center ...


TOPICS: Business/Economy; Education
KEYWORDS: college; salliemae; studentloans
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1 posted on 10/07/2021 8:16:41 AM PDT by karpov
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To: karpov

Another leftist government “entitlement” gone wrong, creating irresponsibility, creating perverse incentives, and above all, creating a permanent political power bloc


2 posted on 10/07/2021 8:21:21 AM PDT by PGR88
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To: karpov
North Dakota has a great model for those who are fond of public solutions. They have a state owned bank which is the primary student loan lender and a default rate near 0%.

The reason for that is that they severely restrict the amount they will loan for nonmarketable degrees and insist on evidence of academic progress for marketable degrees.

The institutions of higher learning in the state for which they will make loans are, while not exactly conservative, are certainly not left-wing woke diploma mills either.

3 posted on 10/07/2021 8:22:26 AM PDT by Vigilanteman (The politicized state destroys aspects of civil society, human kindness and private charity.)
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To: karpov

Simple.
Its common knowledge in college circles is if you get a job in a non-profit, its likely they will forgive your debt.
I know this as a family member in college told me this is what most of her friends believe.


4 posted on 10/07/2021 8:24:10 AM PDT by Zathras
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To: karpov
“conventional wisdom” ... Thus, the economy would gain, while poverty and inequality were lessened. Few doubted that it would work. The key was more education.

Well, perhaps more training can create more wealth , especially vocational training.

I make more today than I did in the past because I now sell my brain not just my brawn.

But the entire premise has been hijacked by other forces to provide for those at the top.

Add in a source of inexpensive brawn, and we cut the legs out of Americans with lesser skills.

We have been lied to by our authority figures, again.

Good post!

5 posted on 10/07/2021 8:25:02 AM PDT by texas booster (Join FreeRepublic's Folding@Home team (Team # 36120) Cure Alzheimer's!)
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To: karpov

My parents (born in the 1910s) thought that college was the magical solution to success. And 50 years ago it probably still was. And perhaps STEM curricula still have some use.

But what college often does is fill people’s minds with false and often destructive information (psychology, economics, etc) and these people end up ruining any organization they work for. AOC’s ideas about economics shows that college education can be very destructive. She actually learned her crazy ideas there.


6 posted on 10/07/2021 8:27:35 AM PDT by Seruzawa ("The Political left is the Garden of Eden of incompetence" - Marx the Smarter (Groucho))
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To: PGR88
-- Another leftist government "entitlement" gone wrong .. --

They always go wrong in the long run.

Government is like an invasive species. It disrupts the balance. And it has an infinite appetite for control.

7 posted on 10/07/2021 8:30:21 AM PDT by Cboldt
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To: karpov

I understand that about 75% of college debt is owed by women - many who pursued degrees (or at least attended classes for a while) in areas that will never pay for themselves.


8 posted on 10/07/2021 8:32:46 AM PDT by oldplayer
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To: Seruzawa
-- And perhaps STEM curricula still have some use. --

Yes, but that too is being globalized. I got my engineering degree in the late 1970's and STEM work was being exported then. Easier work and more money, at the time, by getting into the management side, not the nuts and bolts side.

Find a field of work that you enjoy, and do that. Having more "stuff" will not make a person more happy in the long run, but we all need and have a daily grind.

9 posted on 10/07/2021 8:34:12 AM PDT by Cboldt
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To: karpov
Are student loans a net negative? Yes. Same with pell grants and other things meant to make college more "affordable" only for them to inflate tuition and try too hard to squeeze too many square peg students into a round hole.

IMHO, the main way forward it not to blame the gubment or the schools -- they won't change their behavior -- they'll keep doing what's been working for them. The way forward is to tell future students that they don't want to wind up like their parents. Tell them to do career planning, not college planning. Tell them to study careers and figure out what it takes to get into a desired career -- which may or may not involve college and my require a cheap college.

Quit talking like college is the goal. Likewise we shouldn't talk like college is the antichrist. Instead, the focus should be on careers and let the training to get be driven by the career choice.

10 posted on 10/07/2021 8:35:53 AM PDT by Tell It Right (1st Thessalonians 5:21 -- Put everything to the test, hold fast to that which is true.)
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To: Zathras

Same for government jobs. Just continues the downward spiral of our nation


11 posted on 10/07/2021 8:38:34 AM PDT by Freee-dame
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To: karpov

My EX son in law has a 4 yrs degree in Psychology with $100k in loans. He thinks he is the smartest person he knows. Can’t find a job with his degree so he is driving a fork lift at the local factory.


12 posted on 10/07/2021 8:45:09 AM PDT by IAGeezer912 (One out of every 20 people on the face of the earth are Americans. We have won life's lottery.)
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To: karpov

I worked at one of our local colleges - tuition rates had very little to do with the costs of running the school. If financial aid went up we raised tuition and fees. If student loan amounts went up we raised tuition and fees. Due to privacy laws we weren’t allowed to talk to parents about students grades or status, but we could talk to them if they wanted to pay what the student owed. Even had a private organization called “Student Life” that charged students for recreational and housing opportunities and was given free land to build structures on and rent out.What about State audits you say? They looked the other way as this was the way things had always been done.


13 posted on 10/07/2021 8:46:06 AM PDT by Bellhead (Romney take a hike!)
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To: karpov

All student debt should be forgiven and it should come out of the endowments of the universities that exploited dumb 18-year olds for their student loan dollars.


14 posted on 10/07/2021 8:50:38 AM PDT by E. Pluribus Unum ("Communism is not love. Communism is a hammer which we use to crush the enemy." ― Mao Zedong)
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To: karpov
Prior to the advent of federal student aid programs, college wasn’t expensive

Funny how that works, eh? Prior to Fannie Mae and Freddie Mac, houses weren't nearly as expensive (in relative terms) as they are today. Prior to Obamacare (and at the state level, prior to "health insurance reform" laws), health insurance wasn't nearly as expensive as it is now, either.

15 posted on 10/07/2021 8:50:50 AM PDT by Sicon ("All animals are equal, but some animals are more equal than others." - G. Orwell)
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To: karpov

Education factories realized if they dumbed-down ‘studies’ and accepted remedial ‘students’ they could scam $200,000 bucks per ‘student’.

They were greedy, vile and lacking conscience - and rationalized their theft by saying anything less would be ‘racist’... which covered kids of all races that were not qualified to be in ‘higher education situations.


16 posted on 10/07/2021 8:53:48 AM PDT by GOPJ (https://www.youtube.com/watch?v=wOC_dcuJO48 Song: Willie (prick)Milley, Gen Austin & Winken Blinken)
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To: karpov

1. By liberals insisting “everybody get a college degree” regardless the person’s aptitude, interest, or ability. Liberals know best.
2. By government providing “free money.” EVERY SINGLE TIME government tries to fix a problem, it gets far worse. Government knows best.

Every time you intersect liberals and government you get a gigantic problem.


17 posted on 10/07/2021 8:55:17 AM PDT by ProtectOurFreedom (“I believe the best social program is a job” ~ Ronald Reagan)
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To: karpov
When Congress made student-loan debt nondischargeable in bankruptcy, lenders stopped caring about creditworthiness and lent money to anybody as a student loan.
Whether the course of studies is for medicine or SocialJusticeWomynsStudies no longer matters.
Whether the cost of tuition and fees is reasonable or exorbitant no longer matters.

To fix the problem, make newly-issued student loans dischargeable in bankruptcy.

18 posted on 10/07/2021 9:18:39 AM PDT by T Ruth (Mohammedanism shall be destroyed.)
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To: karpov

I’ll take a guess and say.... the banks.


19 posted on 10/07/2021 9:20:28 AM PDT by Clutch Martin (The trouble ain't that there is too many fools, but that the lightning ain't distributed right.)
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To: IAGeezer912

He needs to get his head examined, but 4 years worth of training wouldn’t qualify him as a dog psychologist.


20 posted on 10/07/2021 9:27:56 AM PDT by The MAGA-Deplorian (Democrats are lawless because Republicans are ball-less!)
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