Student debt is being compared to the housing crisis. Catastrophe? Imminent. We’re thrusting our kids into vast amounts of financial turmoil, and for what? Disaster. And while that may be true (education does need a transformation), debt is not the main issue on a young person’s mind.
“You would think that student loans are young people’s only priority,” argues New York Times columnist Charles Blow. “They’re not. In fact, a cleverly designed survey released this week by Harvard University’s Institute of Politics asked respondents ages 18 to 29 to choose between pairings of issues to determine which ones they felt were more important. Among domestic issues, creating jobs always won.”
Student debt wouldn’t be such a big deal if recent grads could find a job. Because the problem isn’t the loan, but the job to pay off the loan to start living life. You only care about paying off student debt if you’re ready to settle down, buy a house, get married, and have kids. But young people delay adulthood. We buy houses later. We get married later. We have kids later. So it doesn’t matter that paying off loans comes later too — if you have a job.
While there has been much ado about the cost of tuition – college debt has reportedly tripled since 1981 – students rarely pay the full tuition cost because scholarships and financial aid have risen as well. “For the current school year, the average sticker price for tuition and fees at a private, nonprofit college is $28,500,” reports NPR writer Jacob Goldstein. “And yet, the average price students actually pay is less than half that — $12,970. That’s almost identical to the $12,650 that students paid, on average, in the 2001-2002 school year.”
Not to mention, college debt is a deliberate choice young people make. I’m from Illinois, but went out-of-state for school. My mother pleaded with me to go in-state. Same education, lower cost. Of course I knew she was right, but every college student knows the price of higher education doesn’t simply include courses, room and board, but the experience of stepping out and being on your own. An experience I simply didn’t want to have in my hometown.
Many other young people have made similar choices. Kelsey Griffith, 23, attended Ohio Northern, a private college that costed her nearly $50,000 a year. “As an 18-year-old, it sounded like a good fit to me, and the school really sold it,” Ms. Griffith, a marketing major, told the New York Times. “I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”
You’ll have to forgive me if I don’t sympathize with Ms. Griffith. Smart enough to go to a private school, but can’t do basic math? I pity the marketing budget she’ll soon manage.
We deliberately choose to take on debt to get the best possible education. And while the same could be said of mortgage debt and our pursuit of the American Dream, unlike the the housing crisis, student loan interest rates are low, and the forgiveness level is high. If you don’t have a job, you can delay payments. If you’re experiencing economic hardship, you can delay payments. God forbid you want to go back to school and incur more debt, you can once again delay payments. The system does everything it can to help you get on your feet.
Personally, I went to a public school trading the corn of Illinois for the cows of Wisconsin. At the time, University of Wisconsin-Madison’s out-of-state tuition was the highest among Big Ten schools. The University of Illinois-Champaign-Urbana (located in my hometown) was the lowest. My debt totaled around $12,300 (the average per borrower is $23,300, not the $60,000-$100,000 outliers often strut out in news stories). I paid it off earlier this year, in part, because I’ve been continuously employed since graduation.
Many other young people aren’t so lucky. A whopping fifty-three percent of recent college grads are jobless or underemployed, and that’s why we care eighty percent more about creating jobs over addressing social security, lowering the tax burden on Americans, income inequality, combatting climate change, reducing the role of big money in elections, or developing an immigration policy.
Not a generation to be down on our luck, we’ll take a paycheck where we can get it. Recent graduates are now more likely to work as waiters, waitresses, bartenders and food-service helpers than as engineers, physicists, chemists and mathematicians combined. Steve King of New Communications Research argues “the grim job market is another key reason more young Americans are pursuing work as independents (temps, freelancers, etc.).”
Gen Y just wants to work. So let us. Provide jobs that could change the educational system, the economy, the world, instead of fussing about student loans. Then Gen Y could pay our debts, and that would be energy well-spent.
28 replies on “Stop Fussing About Student Loans, and Find Gen Y a Job”
Good, balanced, well-thought-out analysis.
But what’s the solution? “Bootstrapping?” If you can’t find a job, make one? Maybe.
Personally, I’d love to see more jobs created before tackling the student loan issue. But I also think jobs created by entrepreneurs – and not the government or large multi-national companies – are ones with the most potential to hire Gen Y workers and make them wealthy.
Hopefully, Gen Y will spend more time creating jobs, even (especially?) their own.
The solution? It’s interesting. Most people will turn it back onto the schools. Universities need to be providing students skills! Gen Y can’t find a job because they haven’t been taught/haven’t studied the right thing! Those seem to be some of the main arguments, which are bollocks. I mean, yes, let’s teach the future generation skills, but I don’t buy that a person smart enough to go to college isn’t smart enough to figure out how to get a job.
I put the onus back on Gen Y then. Right now, we’re a bit defeated. It’s up to us to realize the nature of work is changing, accept that and redefine what a career means. I consider this generation lucky to be working at Starbucks. People skills are the #1 thing that will get you ahead in your career and you don’t learn that sitting behind a computer.
Start-ups will probably be part of the answer, yes. I think the problem with start-ups is that we don’t provide mass amounts of jobs, but I also think that’s just the reality of career market now. While I don’t expect all of Gen Y to become entrepreneurs, I do know that we will all be slashers (speaker/manager/volunteer/freelancer/consultant), and we’ll have to piece together an income. The prevailing ethos, however, still remains the elusive “find your dream job, find what you love, and do it forever.” And that’s holding Gen Y back just as much as our debt.
You said:
“The prevailing ethos, however, still remains the elusive “find your dream job, find what you love, and do it forever.” And that’s holding Gen Y back just as much as our debt.”
I’m not sure if you have yet, but if you haven’t, please write this post.
I agree. Those who are doing the “find your dream job, seek it out” often never find anything.
They constantly look for the path, instead of creating it themselves.
How about, just getting a job first and then make a qualified decision before you take on a loan and go study.
Unfortunately, most my friends don’t even want to work with the stuff they were educated for. But they are stuck as they need to pay off their loans.A bit harsh, but that is how life is dealt atm. And prolly be so for many years to come.Or maybe one solution is to buy a National lottery ticket :)
I’ve never worked in the area of my degree (which was very specific and skills-based). Because of that, I don’t think it matters that you get a job first and then study. That still conforms to the idea that you need to find this elusive area that you love and is your dream job, which is really difficult to find for most people, and certainly doesn’t exist the way many young people imagine.
The key to finding what you love and what you’re good at is to try different things, and college is a great avenue for that. You can take a myriad of different classes, you can get college jobs, volunteer for different organizations. And you can keep doing those things after you graduate as well.
I don’t know why we’re so stuck on the idea that education needs to be focused on a specific area of study and then you need to work in that same area or you’re doomed. Do whatever the heck you want. Work wherever. Take responsibility. I don’t typically like to be so hot on personal responsibility, but in this case, I think it’s warranted. Gen Y is playing a bit defeated. We didn’t expect to start a careers in a recession, but that’s the hand we were dealt, as you say… Thanks for the comment!
Great post, Rebecca. I am one of those outliers that has quite significant student loan debt, but I also beleive that creating jobs is the answer to this problem. I was 18 and decided to go to a out-of-state private school with a hefty price tag and while I understood the fact that I’d be paying off student loans for quite some time, I guess I didn’t realize the magnitude of how much it would really cost me. (I was a naive 18 year old – I’ve come a long way since then!) I have come to recognized though that I will live with this debt until it’s paid off and I can guarantee you that it’s been my number one motivator when looking for a job. I graduated in 2008 right when the economy bottomed out and I’m happy to say that I have never been without a stable job or paycheck. I’ve never lived at home and have never relied on my parents or other relatives for financial assitance. Maybe this “crutching” student loan debt is a good thing because it forces our generation to be independent and to make sound decisions about our financial future. Again, thanks for the great post!
Hi Jenny, thanks so much for sharing your story. It’s great to hear of someone who does have crushing debt being so proactive about it. I do understand that when we’re eighteen and trying to decide how to start our lives away from home, we are a bit excited and naive… especially in our quest to get the best possible education as society tells us that’s absolutely essential to succeed. The conversation needs to shift to letting our young people know that is an education is an education is an education no matter where you go. Although I wouldn’t have traded my experience for no debt, and I’m guessing you wouldn’t either. I agree that I hope this early financial lesson will make Gen Y more responsible in their future money decisions. Here’s hoping! :)
I agree! I had a fantastic college experience, but looking back, sometimes I do wonder how things would have been if I’d chosen a school that offered me scholarships and/or had a lower tuition. But you’re right, I learned from my experience and wouldn’t trade it for the world.
P.S. Definitely meant to say ‘crushing debt’ not ‘crutching’ which I am pretty sure isn’t even a world. :)
Haha, I knew what you were trying to say :)
Good insights Rebecca. I’m with Jenny in that I am an outlier. I have just over $80,000 in student debt from undergraduate and postgraduate studies. I got caught up in a PhD program in 2007-2009 right before most of the grants and lines I was promised dried up and went away.
Couple that with some surgeries which took place in college and let’s just say financial troubles abound.But now, I find myself unemployed thanks to a recent layoff at the small company I worked for. Let me tell you, the student loan debt hangs over me like a black cloud.
You mentioned above about Mrs. Griffith, who said she didn’t know she would be paying $900 a month after she graduated. You don’t sympathize with her, which is your choice, but she is like 95% of most 18 year olds who take out loans, told to sign on the bottom line.
If you at 18 years old understood the full ramifications of taking out student loans, you are among a very small number of students. At 18 I just signed. This is the only way to go to school, so you sign your life away. Most 18 year olds had their only job as a cashier or a summer camp employee and don’t understand how a $900 a month payment will affect their ability to buy a house, buy a car or live a normal life.
I understood I would be paying a good chunk of change, but never understood the full impact it would have on me, both economically and mentally.
Hi Ryan, thanks so much for sharing your experience. I do admit I’m a bit hard on the people who took out massive loans. Like Jenny notes, and I agreed with, we are a bit naive at that young age. I’m wondering after your massive debt why you went back to school again and again? Surely, you didn’t continue to be naive? It was your choice to pursue a graduate degree and then a PhD? Or did you feel that was the only option?
Taking on debt is the only way to go to school, but that doesn’t mean we have to go to the most expensive schools. That’s a conversation that we need to change immediately for the current generation going to school. And the idea that advanced education is the answer if you don’t have a job also needs to change.
I am curious, do you feel like the debt was worth the education you received? Would you feel differently if you were currently employed? Do you think your unemployment has to do with not being sufficiently prepared in school, the bad economy, or something else?
I don’t think there are any right answers, just curious to know your experience. It’s fascinating to learn about the different paths that people take and why, and I always learn from those that are different than mine. Anyway, thanks again for sharing your story!
I luckily didn’t go to an expensive school. My first undergrad year I went to Ohio State because I was an engineering major, which was more expensive. When I switched majors to Linguistics/Spanish, I transfered back home to University at Buffalo and went for free my first year because my dad passed away when I was in HS and there were grants for single parents.
Here’s the bitch. When my mom got remarried, they took everything away from me, even though my stepfather makes a very meager blue-collar working salary. I lived at home with my parents, never dormed and worked a 40 hour job to pay off what I could.
Graduate school was a different story. I wanted to go for my PhD and be a professor, so that is your only option. I went to University at Buffalo (again, a cheaper school) but the grants and funding lines began to dry up as soon as I entered the program.
My undergrad/graduate degree is in Linguistics, which is useless unless you actually are in academia. I took a chance on the PhD and came out underwater. I am fluent in Spanish though, which certainly helps.
The troubling shift for me is the need for postgraduate education. Before, a high school diploma was normal and going to college was being a step ahead. Now, going to college is normal and you need a masters, MBA to get ahead.
My undergrad did not prepare me for business. I have never taken a business class in my life.
I’ve worked the last six years in soccer/digital marketing. I’ve owned a minor league soccer team, worked for leagues, businesses and consulted and given keynotes along the way. All of my business/digital skills are self taught.
Hindsight is 20/20 in terms of what I learned in college. I learned a lot about myself, how I work and what I want to do, but I’m not sure that was worth 80k
Oy, your comment has me jumping up and down in frustration, haha. What do you want to go into that requires advanced degrees like a Masters or MBA? I completely disagree with that notion. Like you say later, we’re in the age of self-education, and the barriers to doing whatever you want are so low.
I’m also surprised that we’re still having the conversation that because you studied something like linguistics that your degree is useless. I studied design and environmental studies and have never used be degree except for a few short months after graduation. I work in PR and marketing now. I get upset when people say they didn’t learn anything in college. While I may not be designing places, I use my experiences in college every single day. Of course, I realize my experience is not the same as everyone else’s.
I appreciate your honesty too that you don’t think your education was worth $80K. If I had that much in debt, I think I would say the same thing. You have a particularly tough case study and I’m so glad that you shared it with us. It definitely gets me thinking more…
The barriers to self-education are very low, but there is still a value in my mind of being in an educational environment, immersed in learning and having a focus. A MBA certainly is not necessary, but I think self-learning lacks some of those core qualities which makes college actually valuable.
Maybe grouped self-learning is the next step. Sort of like book club, but for those who want to learn and form their own study groups. Brooklyn Brainery does something like this where they focus continuing ed classes on whatever topics people find interesting. Could catch on if you got a econ professor to teach a basic econ class. Shit, if he/she is a adjunct, they are making peanuts already!To your point about a useless degree, of course my degree isn’t completely useless. I use bits and pieces of my degree throughout the day and my Spanish fluency I use everyday.
When I say useless, I mean from a completely objective business sense. Did Phonology II help me be able to understand producing a new product? No.
Does mapping the polish sound system and being able to discuss formant structure help me run a business? No. But does learning how to formulate research questions, find answers and solve problems? Of course — all skills I utilized and honed during my postgraduate education.
Hi! I’m one of those idiots smart enough to get into a private school, but not smart enough to do basic math.
You are naive when you’re 18, but it wasn’t just us. Many of us didn’t anticipate the massive student loan debt crisis that we would be in now. A lot of the higher education advice 10 years ago was focused on working really hard to get into the best school and had an emphasis on more degrees equals more money. The advice about higher education has changed. Now it’s go for the less expensive school and not necessarily the “better” one. There’s more talk about switching over from a community college to a state school. Now people are saying, “Just kidding! You don’t really need a Master’s for that job.” While I think that the shift in the conversation is good and likely to leave less 20-somethings with so much debt, those of us who took that advice 10 years ago are stuck. And student loan companies aren’t as forgiving as you think. Some will say “No” to a delay request.
I don’t think that you can really separate the job issue and the student loan issue, and I would argue that student loans take precedence. Someone who is fortunate enough to make at least the minimum on a $1,000/month student loan payment could still be paying off loans until they’re in their 50s.
I guess it’s just a big mess and I’m not sure what the solution is – although I do think that the Student Loan Forgiveness Act and the shift in the higher education conversation are good starts.
I don’t know. I’m just going to keep fussing about my loans, I guess.
Great thoughts, Ramou. Definitely the shift in conversation has been positive for society, but comes a little too late for some. Did you expect to make a large salary when you graduated school? And is your debt from primarily your undergrad or grad school or both? Do you feel like the debt was worth the education you received?
I guess I’m wondering the same things that I asked Ryan — after incurring debt, why did you go back to school to incur more? Surely, you didn’t continue to be naive? It was your choice to pursue a graduate degree, right? Or did you feel that was the only option?
Normally, I am not so gung-ho about personal responsibility, but in this case, I think it’s important. As a society, we’ve done a good job paying down our debts when the housing market crashed, and I’m confident we can do the same for student loans if Gen Y has access to good jobs.
My situation is unique (or, actually, it’s not – just no one talks about it). Most of my debt is from law school. I was a journalism major (and am fortunate enough to not have that much debt from undergrad despite going to a private school) who was really not interested in being an unbiased journalist when I graduated in 2005. I worked retail for a year, started paying off my loans, and studied for the LSATs and applied to law school because it seemed like a good option for me. Unfortunately, I didn’t do so well, and, along with a few of my peers, was not asked to come back after my first year. Sure, maybe I could have worked harder or maybe I simply wasn’t prepared for law school or I went for the wrong reasons and didn’t put enough effort into it. Other than a few stories and the ability to win an oral argument (I won an oral argument award and got kicked out!), I have nothing to show for law school. Of course that’s frustrating and of course I take responsibility for that. But I guess the silver lining is that I have a lot law school friends who are currently jobless and I’m not. So lucky me?
I pursued a Master’s with the intention of getting a PhD, which was probably the path that I should have taken after college and not law school. I wanted to be a cultural academic who taught, wrote books, and helped change the world, to put it simply. Unfortunately, as a Black woman, it’s hard to be taken seriously if you’re not highly educated – even then, it’s hard to be taken seriously.
I’m not unhappy with my Master’s decision. This time I did a lot more research and found a program that fit me and is pretty generous with funding. The cost of my degree is about equal to one year of undergrad I’ve learned a lot of skills that have helped me establish myself as a sort of authority on the race/privilege discussion, so it has been worth it to me.
Ramou, that is really fascinating. You probably dodged a HUGE bullet by not becoming a lawyer :) And while you have a lot of debt from that year, just think of all the debt you would have had if you had continued! I don’t have the link right now, but young lawyers are extremely unhappy in part due to their excessive debt levels.
It sounds like the money you spent was required for your happiness or at least contentment, and seems like it was worth it to you. Is that fair to say? So does it matter that you spent that much? I’ll answer my own question and say yes, it shouldn’t cost that much to figure out your life, but then isn’t education priceless at the same time? ;)
Thanks very much for sharing your path – it’s so interesting to hear about your ebb and flow.
I know a handful of friends where their parents never went to college and they said their “ticket” to success, a job, and being able to ever leave their small (lacking economically) hometown, is to go to a good college. This is what continually, they tell their children even when they’re young.
There is never talk about loans, what it will incur once you graduate and they definitely aren’t taught that in high school. Furthermore, they don’t realize how the statistics show it really doesn’t matter where you went to college for your career…
How do you research and learn all those things when college is just an experience that you’re bright eyed and bushy tailed about? When you get $30,000+ in a loan and you’re 18 you sign on the dotted line thinking it’s something positive. A lot of people, especially young, don’t think 4-5 years IN the future. That’s just the truth, doesn’t mean it’s right but lets try to find a teenager that researches like that and is able to look into the future 4-5 years.
Myself, I went far away because the experience was important but my student debt isn’t insane. I paid attention to the private tuition and worked throughout all of college. I have about $25,000 to pay off and pay about $300 a month. It sucks to have debt of course, but I focus on trying to pay more and pay off my debt sooner than later. I too, have had a job since I’ve graduated.
I know this is a hot topic for a lot of people and I do have sympathy for graduates who have great degrees and work hard in college, but can’t find a job anywhere but have a $900 a month loan to pay off. All the answers aren’t in front of you, even if it may be basic math. I think education in schools (and parents quite honestly) should be changed. That’s a good place to start…
Great points, Grace. It’s funny how much of what we do is decided by the societal conversation at the time. A lot of people that are getting loans need to do it because like you and other commenters point out, that’s just what an education requires these days. Is it fair? Probably not. But we’re already complaining about education effectiveness and less money probably won’t solve the problem.
I don’t see the average debt as insurmountable for a college grad. For those outliers that have substantially more than that, man, that’s tough. And I know I’ve been harsh on them. But I get tired when the conversation is centered around fretting about the ballooning debt when we should be talking about how to create jobs since that would certainly alleviate the pain for many.
Thanks very much for sharing your experience. I’d love to know the same things I asked some of the other commenters – Have you found your education worth the debt? Would you feel differently if you weren’t employed? Knowing what you know now, would you change your educational choices?
I really agree with you. Focusing on what already exists (debt) and lamenting about it, doesn’t do us much good. I like focusing on creating jobs, however, I think it would be great to create jobs AND have education on debt/less debt. That is in my eyes, an ideal to strive for and I will teach my someday children about if I can.
I absolutely loved my education. It was a private college in New England and the community, education, knowledge and practical application (you do at least 2 internships, they teach you about investing, college loans, real life pieces, etc.) was great. I wouldn’t have changed my college education.
I do not think though, that I am employed because of my college or therefore my degree. So although the experience was beautiful, I could have little to no debt and probably still be successful because it boils down to who we are.
I’m passionate about educating those in high school about loans, college / degrees and what that means today, etc. I have so much more hindsight and wish I could share with other students. I do whenever I can, I just don’t always have access to students :)
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I agree that creating jobs so that kids coming out of college have some way to pay their bills is important. Very important. However…when you imply that an 18 year old is stupid if they are unable to look into the future and fully grasp what it will be like to pay back student loans, in addition to housing, utilities, etc., it really rubs me the wrong way.
Have you ever read anything on frontal lobe formation? Studies are repeatedly showing that it is not fully developed until sometime in your mid-20’s. Here is an easy article explaining it (although there are many more in depth studies out there if you wish to find them – they are fascinating): http://www.npr.org/templates/story/story.php?storyId=124119468. Expecting an 18 year old kid, whose frontal lobe isn’t even fully developed yet, to be able to always see the consequences of their actions years down the road is ignorant.
It’s irresponsible and honestly, just plain mean, to imply that if an 18 year old KID can’t fully grasp what life will be like in 4+ years, that they must be stupid. They’re teenagers, for crying out loud. Most have never had to go out and get a job to support a family (including a mortgage or rent, utilities, debt payments, food, etc.). It’s a concept that most teenagers haven’t had to figure out yet, and it can be very difficult to grasp. Even for a smart kid. That’s why we have parents to (hopefully) guide us and help us understand what that loan will look like in 4-5 years, what we can realistically expect to make out of college, what our other expenses will typically be, etc. Thank God my parents didn’t just tell me I was stupid since I needed their help in figuring it out. And I will never, ever tell my son that he is “stupid” if he needs help figuring life out.
I myself went to a good university and have a very good deal of student debt. I pay $950 a month and alongside my car insurance and gas it’s easily $250 as well. I enlisted in the Marine Corps because it would make life a bit easier than working two full time jobs as I’ve been doing for the past month just to survive. I am so tired of working for nothing. I worked as a bus boy with a bachelor degree because I “lacked experience” or was to “over qualified” for other jobs. I also worked security at a night club which also was not the best of career choices for my semi ivy league piece of paper. I wish I could go to Congress and tell them to get to work or I will replace them.
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Rebecca,
I like your article. But what I don’t see is any discussion of the impact of student loan marketing to students. For instance, during my law program student loans were marketed to my class as “pay as little as $50/month.”
Many students never realized that this was per loan, or that $50 per month was the minimum payment, not the maximum, and finally that a student may have taken out multiple loans each semester (subsidized, un subsidized). After all, it’s just one form to fill out, right ?