How Student Debt May Be Stunting the Economy
Written by Neil Irwin | May 14, 2014 | Source: nytimes.com
This article focuses on the issue of student debt in correlation to a weakening economy. Student debt in this country has been climbing with no end in sight. More and more young adults in their 20s and 30s are choosing options to either room with other people or go back home to save money and pay off their debts. This is delaying the purchase of a new home or a new car, or whatever a young adult would be buying as they enter the “grown-up” world.
With education costs ramping up, students need to take out larger loans increasing their post-graduation burden. Student loans are not based on credit worthiness or ability to repay them, so why wouldn’t colleges keep raising costs. With a lack of jobs in the market, along with wages remaining relatively flat, individuals in this generation Y demographic will not be able to keep their head above water. This places a strain on our economy; we need consumers to keep this engine running.
What if education costs were based on your degree and it’s potential earning capacity after graduation. If Student A majored in Humanities & Social Science and Student B majored in engineering, both students paid the same for a 4-year degree, will both students make the same income after graduation? Maybe we should have the cost of a degree be based on it’s earning potential.
