Are there more rudimentary reasons behind the student loan crisis that we are unwilling to face?

NOTE: Be sure to also tune into my in-depth with eCampus News’ Associate Editor Denny Carter regarding the student loan crisis (The Truth Behind The Student Loan Crisis).

As I read this morning’s article in the Washington Post regarding the continuing crisis with student loans and the fact that delinquency is actually having an impact on the country’s seniors – according to the Federal Reserve Bank of New York people 60 and older still owe $36 billion, I could not help but wonder why?

Back in the day, a university degree was a privilege that very few had the opportunity to pursue.  In fact education in general was often times viewed as being of secondary importance to an able bodied young adult’s obligations to contribute to the family’s financial well-being.

I can still remember the depression-era story my father shared with me about how despite being a straight A student in high school, his widowed mother could not afford the $5 for him to write his final exams.  Needless to say he never graduated and after serving in the navy during the war returned home to work at a packing plant eventually being promoted to night manager.

While he never lamented his lot in life . . . in fact at the time of his death at the age 66, he had paid off the house in full, was debt free and, was able to save enough money to provide a decent nest egg for my mother, he always believed in the value of an education and as such ensured that my brothers and I had every opportunity to attend university.

By the time my older brother had graduated from university with a Ph.D. in Political Science (he himself is now a tenured university professor), higher education was a common entitlement to which all young people aspired.  As a side note, my brother did have to work a part time night shift flipping burgers to help offset the cost of books, but emerged with a degree in hand debt free.

In retrospect one can’t help but wonder what the real cost of this transition from privilege to right means as it would appear that the vehicle by which college became accessible may have been built on a house of cards with a mortar of crushing debt loads that significantly surpasses that of even credit card and auto loans.

While there is a general consensus that the cost of education is the culprit, over the past 10 years it has risen between 2 and 6 percent per annum, others point to the fact that even though those with a university degree have greater options resulting in lower unemployment and higher wages, they are still struggling financially to make ends meet.  Hence the reason for the high level of continuing debt and defaults.

However, is there perhaps a much deeper problem that like the 800 pound gorilla in the room, no one wants to address simply because it may very well shine a scrutinizing light on how we live and manage our finances?

As I am sure you can imagine, the cost for my brother to attend university to obtain a doctorate was not cheap.  But in addition to his working part time, my father made a significant contribution to help defray the expense by his diligence in terms of putting aside money over the years.  What this meant is that my brother attended university on what was largely a pay as you go basis, so that at the end of the road he did not enter the working world saddled with a huge debt.

This leads to an interesting question, and reminiscent of our over reliance on credit cards to get what we want now as opposed to saving up for it – my father for example never had a car loan as he always paid cash for his vehicles (and this was someone who in the 1960s earned around $65 per week), how many parents and students looked at student loans as a substitute for saving money to attend university or college?

For that matter, what percentage of those who attended college and took student loans like my brother, had part time jobs to help pay their way?

Now I am certain that the above questions will likely be met with a high degree of angst if not outright hostility but, I cannot help but wonder if the borrow now and pay later after I get a big paying job gamble caused far too many people to pursue an education that they might not otherwise have contemplated.  And I am not just talking about attending school in general but the the choice as to what their major would be and whether or not they had a solid understanding of the post education job market a degree in their chosen field would offer.

Or to put it another way, did a no cost – no value mindset permeate our collective consciousness whereby instead of saving hard earned money to go to school and therefore chose a degree that was more practical relative to post-education job prospects, give way to a I’ll worry about it tomorrow entitlement where our curriculum choices were ultimately unfavorably skewed?

Even though rising education costs are indeed a problem, until there are definitive studies that address the above questions, we are going to continue to have problems that similar to credit card debt will cause us to experience unnecessary financial hardship.

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