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Do We Hate Our Children? The Insane System That Turns Young Adults into Indentured Servants

We crush them with debt to go to college -- and today, rates are actually set to double. Are we out of our minds?

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Meanwhile, public universities are spending on new buildings, but they’re sharply hiking tuition as well as either cutting or just maintaining enrollment. (University of Wisconsin in-state tuition has doubled in just the last decade.)  The Public Policy Institute of California (PPIC) found that the share of young people enrolled in U.C. or California State University campuses dropped 20 percent in the five years between 2007 and 2012. “You can go into any community and talk to somebody whose son or daughter either can’t get in or can’t finish [college] because they can’t get this or that course,” David Wolf, co-founder of the Campaign for College Opportunity, told California Watch. “Meanwhile, they go on campus and there’s all that fresh cement. That’s embarrassing, and it’s wrong.”

In the 1980s, at the flagship U.C.-Berkeley, more than half of all applicants were accepted; this year it was closer to 20 percent, as 67,000 applicants vied for 14,000 acceptances to the incoming freshman class (of 4,200 students, unchanged in the last 10 years).  Meanwhile, both public and private aid has shifted from “need-based aid,” which tends to go to lower-income kids, to “merit-based aid,” which is tied to income but less directly.  Not surprisingly, at Ivy League schools and the “public Ivies” (which includes the U.C. and U.W. flagship schools), 80 percent of  students admitted come from the top income quartile of American families; only 2 percent come from the bottom quartile.

Astonishingly, in 2008, older people born in California were a third more likely to have college degrees than younger native Californians, according to PPIC; elsewhere around the country, the difference was only 1/16th (30.9 percent versus 29.0 percent) – but still: young American adults are less likely than older Americans to have attended college. This has to be the first generation for whom that’s true. We’re putting the history of American progress in reverse.

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With student debt so pervasive and crushing, of course it matters that Congress do something to keep interest rates from rising. The House GOP is gloating that (in a bizarre role switch) they’ve passed a plan, and the Senate hasn’t. The House GOP plan would send students out into a maze of “market-based” adjustable rate loans.  Why should someone at age 18 have to navigate a thicket of variable rate loans, where their interest rate could double over time? But even the compromise Obama plan, which would let students lock in a rate once they decided on a loan, has no cap on interest rates.

A growing number of voices, including the Fed, are pointing to the way this debt burden is a drag not just on the borrowers but the wider economy. That One Wisconsin Now survey found that student debt reduces average aggregate car purchasing by $6.4 billion a year. Young people are leaving school with the kind of debt that was once only incurred by the purchase of a first home; not surprisingly, it’s depressing home buying too.

That practical economic argument is important, but almost no one is making the larger economic argument, that expanded access to higher education is good for everyone, period. There are proposals to reform the student loan system to make it more like a standard loan agreement and less like indenture. The Obama administration has expanded opportunities to have debt reduced for those in education or other public interest careers, which is great. But when we talk about doing big things again, when we dream about infrastructure, why are none of our major leaders advocating for new campuses for our state universities and colleges?

 
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