College Is Bankrupting Floridians And America

Definitely Not Decaf By Ira Pickett
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2012 Graduates Enter The Workforce With Massive Student Loan Debts

2012 Graduates Enter The Workforce With Massive Student Loan Debts

If you are looking for a place to escape the last several years recession, it appears you need not look much further than the 5,658 {and growing} higher education institutions throughout the United States. 

Amazingly, while the rest of main-street USA has been downsizing, holding on to their cars longer, getting behind on debt and mortgage payments, minimizing weddings, and looking for every possible way to cut corners in their family budgets, the American higher education system continues to grow at an astounding rate.  Furthermore,  our government and the educational system as a whole has created the assumption that in order to be successful in life, a college education is a must-have which ultimately encourages even more students and families to go into debt every year just to afford it. 

For the past 20 years,  higher education costs have been spiraling out of control, well BEYOND the rate of inflation and at an even greater rate than even health care costs, yet it appears to be a taboo topic among the media who seemingly are abstaining from confronting or recognizing it as a problem.

Consider some of these shocking statistics:

*In 1990, the average tuition and fees for a typical public 4 year college or university was about $2,500/year.  Today, in 2012, that number is approximately $8,000/year according to national estimates.  This number DOES not include housing, food, books, fee’s, health insurance (required) and other normal living expenses.  When these basic’s are included, the 2012 total skyrocket’s to over $19,800 per year (*source : University of Florida  http://www.sfa.ufl.edu/basics/cost-of-attendance/) .

*Since 1978, costs to attend college have risen at over 9 times the rate of inflation.

*In 1990, the average college graduate earned approximately $31,000 per year right out of college.  Comparatively, the median household income for the State Of Florida in 1990 was $21,685. (source: U.S. Census Bureau).

*Today, in 2012, 20 years later –  the average college graduate will earn approximately $46,000 straight out of college, compared with an average Florida median household income of $44,243. (source: U.S. Census Bureau)

*Among current graduating 4-year undergraduate students who applied for federal student aid, 86.3% borrowed to pay for their education and the average cumulative debt was $24,651. (source: 2007-2008 National Center for Education Statistics at the US Department of Education)

*Recently published statistics indicate that the total national student loan debt has eclipsed $1 Trillion in 2012.  Compare that against the TOTAL U.S. National Deficit that is estimated to be $17 Trillion.

Much like the housing boom that started with congressional mandates instructing banking institutions to relax their lending policies and procedures to ensure “fairness” and guarantee that “everyone” have an opportunity at home ownership, higher education has taken the exact same path in creating a nearly identical unsustainable economic scenario. 

Higher educational institutions have seemingly taken advantage of this existing situation of free-flowing cash with unabashed enthusiasm by continuously raising rates, building massive lecture halls & athletic stadiums, paying exorbitant salaries, and further promoting and marketing their own agenda by playing on the fears of well-intentioned parents who want what is best for their children’s occupational future.

As parents and taxpayers underwriting the $1 Trillion student loan debt, we should be demanding that our government and the higher educational institutions that are taking and using our money be required to answer some of the very difficult questions that Wall Street and corporate mortgage lenders had to answer after the housing bust.  Considering the current state of our economy and the projected earnings potential of the average college graduate, it may be safe to assume that the value ratio of higher education compared to its cost burden is a bit out of whack.

How far is Florida and America from being bankrupted by higher education?  By looking at history to determine the course of the future, it appears we may be much closer than many Americans actually realize.

Follow Ira Pickett on twitter @irapickett

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