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The collective debt of American students is now rising to more than $ 1.5 trillion. For some reasons, this is more than the total GDP of Spain or Sweden or any of the 54 countries in Africa.
In addition to mortgages, student loans are the largest source of personal debt in the country, far more than car loans and credit card bills. It's a huge amount of debt. That's enough to distort and paralyze the American economy. It suffices to compromise the life prospects of a whole generation of young people.
If you wonder why the majority of Americans under 30 say they prefer socialism, debt is a major reason. Student loans kill them and they never disappear. Thanks to the lobbying efforts deployed here in Washington, student loans, unlike other forms of debt, can not be erased by bankruptcy.
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The student loan crisis is a modern problem. Just 13 years ago, the average new graduate owed $ 20,000 in student loans. Today, that number has risen to $ 37,000. Student debt is growing much faster than the earnings of American workers, the very gains that are supposed to justify student loans.
For professional degrees, the number goes much higher than that. On average, a law graduate holds a debt of more than $ 110,000. For new doctors, the burden rises to almost $ 200,000 by the end of their medical studies.
In total, two million Americans owe more than $ 100,000 in student loans. Imagine that life begins so far behind. Many people who pay a university loan debt have never even graduated. They tried to improve their lives by attending college and found themselves poorer and more in slavery. And not just a few of them – millions and millions. What are the effects of this?
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Well, the damage is far greater than anything caused by climate change. Young people are broke. As a result, they delay the life transitions that were automatic for previous generations.
In 1990, a quarter of American adults lived with their parents. Today, this number has increased to 35%. The homeownership rate for the millennial generation has dropped eight points from the previous generation. Unable to afford a home, millennia marry later and less often. They also have fewer children. This is not because they do not want children. According to Gallup, the percentage of Americans who want kids has not changed in 25 years. And yet, fewer children are born, partly because of growing debt, the American middle class can not replace itself.
That is why we are told that we must import millions of new workers from abroad. Young Americans want homes and families. Helping them to get these benefits should be our top priority as a country. We can not start before reforming the student loan system. Why have not we done it yet?
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Well, an extremely powerful lobby interposes – colleges and universities. Their lobbyists abound in Washington. Unsurprisingly, it is the people who benefit from the student loan debt. Cross the rural America and you will see how successful they are. In a sea of poverty and despair, you will notice closed islands of abundance. These are colleges.
Colleges control access to credentials, which we believe are necessary and indispensable for success in the modern economy. It's a racket. They are the guardians of modern society and they tear up all the children who go through these doors.
Outside the gates, people are unemployed and are dying of an opioid overdose. Inside the doors, it's like the South Beach Ritz. If you have not been to an American university recently, see it for yourself. Everything is new. A construction boom has been going on for decades on campuses, all funded by debt that is destroying a generation of American children.
A hundred schools now have endowments of over a billion dollars. They are hedge funds with attached schools. What colleges did with this money? Well, they hired huge numbers of like-minded people. From 1987 to 2012, the number of administrators on university campuses more than doubled. This is much more than the increase in the actual number of students going to college. College administrators regularly earn six-figure salaries. What exactly are they doing for this money? Not one thing that makes this country a better country.
College presidents often receive seven-figure salaries. Their salary is probably the only thing in America that is growing as fast as tuition. University publishers are also enriching themselves with the debt boom. Textbook prices have tripled in the last 20 years. The print did not become more expensive; non academic books are cheaper now than they were two decades ago. But students are a captive market, and they are exploited without mercy. Nobody says a word about it.
In summary, young people in this country are impoverished each year. College administrators, probably the least impressive group in the country, enrich themselves at their expense. It is not a law of the universe that this must happen. It's a product of the policy and incentives that our company has created over time.
At present, the federal government allows young people to take out an almost unlimited amount of student loans. Colleges know it, of course, and they raise their tuition fees to get as much money as possible. Young people have little choice but to subscribe to it.
Colleges control access to credentials, which we believe are necessary and indispensable for success in the modern economy. It's a racket. They are the guardians of modern society and they tear up all the children who go through these doors.
What is the solution? Well, here is one. Ask the colleges to co-sign the loans. And why should not they? If you and I enter into a business partnership and we succeed, we share the benefits. But we also share the risk. If we fail, we are both hooked for it. That's how honest arrangements work. University loans do not work this way. Colleges get rich no matter what happens to kids. The children are alone.
If students graduate and decent work and repay their loans, that's fine. But if they drop out of school, or if their degrees turn out to be worthless, like so many others, and that they can not repay what they borrowed, so what? The college is down. They have no interest in the result. Colleges get all the benefits and none of the risks. That's the definition of a scam. It's incredible that it can even be legal. It should not be legal.
Maybe Congress could take 20 minutes of Russia's hoaxes on climate change and solve one of the current problems, one of the biggest problems facing the country. Pass legislation requiring colleges to share responsibility for outstanding student loans. What would be the argument against that? That colleges can not afford it? That taxpayers assume all the risks so that Wesleyan or Brown can build another center for diversity and inclusion and hire more overpaid sensitivity deans?
It's a bit difficult to argue his point of view. It's too silly. Congress should act now. The student loan system will collapse. It's inevitable. Before that, let's say very clearly who benefits.
Adapted from Tucker Carlson's soliloquy from "Tucker Carlson Tonight" of March 18, 2019.
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