I’m not American so the concept of a college loan is very alien to me. In my country we either pay for college tuition up front, apply for financial aid if our grades are high enough and your family is needy enough, or you don’t go at all. And In some public universities, tuition is either wholly or partially government subsidized.
I’ve heard of Americans complaining how they’ve got thousands of dollars in college debt and in some cases they take your whole adult life to pay off. So why are college loans even a thing in the US and what happens when you’re not able to pay it off?
In: 9
All colleges have tuition, and none of it is subsidized unless you get a scholarship for sports or exceptional academics (rare), and in some cases the government will pay a VERY small amount if you and your parents income is considered below the poverty level (this might pay the full tuition for like a technical college or small community College 2 year degree).
If you want a job that pays over minimum wage then you either need to work your ass off to get promoted, become an “entrepreneur” or get a degree in a high demand specialized field from a university. If you go to a college out of your home state, you pay more (so dumb I know), or if you need over 4 years to complete your degree it can be very expensive. 100s of thousands of dollars.
This is a lot of money for the average person, and we have to take out loans to pay for it. Some loans you don’t have to pay until you graduate, and some loans have pretty high interest after a certain amount of time.
If you don’t pay it, your credit score goes down and you won’t be able to get anything on credit in the future (not sure what you know of credit in the U.S. but a credit score is based on your loan payments and total debt and gives a score based upon how well you handle those items and your proven record of paying them back)
Almost all big purchases as an adult are acquired by getting a loan- a home, a car, credit cards, personal loansns etc) and to get approved you need a good credit score. Most Americans are wildly deep in debt just to live comfortably.
By defaulting on a school loan you screw up your future to own anything, and the lender can file a court lawsuit to have your wages garnished so you’ll eventually have to pay it anyway.
A hundred and twenty years ago, colleges and universities were play places for the young adult children of rich people. It was an aspirational goal for middle class people to be able to send their children to a university. There were scholarships available for particularly gifted young people (mostly men) and there were few athletic scholarships.
Then World War 2 happened, and the government in an accident came up with the idea that with all of these returning servicemen that instead of sending them directly into the workforce (when there were not yet enough jobs to absorb all of them) would set up the GI Bill and this allowed many men to attend college when they otherwise would not have been able to. In the early 1950s legendary University of Kentucky basketball coach Adolf Rupp had a starting five players that were all veterans.
I will point out that the memories of the Great Depression were fresh and to many people it seemed like the people that had college degrees did not go hungry like everyone else.
At this point it should be pointed out that Universities were relatively inexpensive. Most of the cost of a state university (think University of Kentucky, or Florida State University) were paid by the state governments. You can find stories of someone’s grandfather putting themselves through college by working summers, for example.
The limiting factor to get into a college was the entrance requirements, and the cost. Some farm families might have had a child smart enough for college but could not afford the loss of labor back home. Many people married at 17 or 18 and since these are the days of no sex before marriage children quickly showed up. It is hard to pay for even the inexpensive college tuition when you need to feed a child, or two.
Then the Viet Nam war started and the Government determined that a man could get a draft deferment if they were in university. You might very well guess that this caused all of the families that could find the money sent their baby boomer sons to colleges, any college. It was at this point that the Colleges and Universities became so big that they wanted to perpetuate that. No institution wants to give up power. In many cases entrance requirements were eased.
After Viet Nam without the draft to send over eager students to their campus Universities started working really hard to find reasons for students to attend. New degree programs were created. New graduate colleges were created. I met a woman that had a PhD in Fashion. Western Kentucky University has a degree in folk studies.
As late as the 1990s college tuition, even with bloated programs was not terribly expensive. It was not work a summer job to pay a year’s tuition cheap but I knew people that by working near full time as an undergraduate were able to cash flow their college expenses. Also, buy this time a college degree was a requirement for many jobs.
That set the table for what was about to happen next.
In the middle 1990s states figured out that they can maintain 100% of the control over their state universities even if they cut their public funding to half (or less). This meant that students had to make up that difference themselves.
With 80 or more years of good ol’ American culture saying that College is the ticket to prosperity most people took out loans. As an important side player int this mix it was not hard to find numerous news stories in the late 1990s and early 2000s stating that grade inflation was degrading the perceived value of college education.
There were a couple of other factors in play that also made college more expensive. Governments determined that they could keep piling on regulatory requirements to Universities, this often meant more administrators. In the 1960s a most large universities a full time tenured faculty would teach their standard load of classes and then advise students and serve on some committee (or two) in the University. In the 2020s some universities have as many administrators on their campus as their are students. Think about that for a minute, each student would need to bring enough money to the university to pay for the salary of an administrator, and all of the other “lesser” overhead like faculty, buildings, and electricity. All of these extra costs
Universities wanted to keep attracting more students. One of the ways they did this was to build more things, like climbing walls in their new state of the art gym facilities, and lazy rivers, and posh housing options. In the 1990s it would not be uncommon for a dorm room to be a cinderblock room 12′ by 14′ that you share with a roommate and furniture from the 50s. Look at the housing options for even the smaller state universities to get a sense for why college is expensive.
College is still looked at by many as THE way for upward mobility. Many degrees are simply not worth it, but it is unfashionable to say so. Because of this many new universities were created, there was simply too much money (from the government in the form of guaranteed loans) for enterprising (if unqualified/unscrupulous) individuals to meet the minimum requirements to offer degrees to students that want to get ahead.
So there it is, the growth of the college at any cost to maintain size (lowered requirements, grade inflation) finding a reason to continue to exist, less public funding, and greater costs imposed via regulation have made the cost of college to be very high.
Latest Answers