Where Does It Hurt?

The world facing today's college graduate just ain't what it used to be. More than $20,000 in debt and faced with plummeting wages, scarce jobs, unaffordable health insurance and exorbitant rent, the average grad is choking on the dregs of the American dream.

But things don�t have to keep getting worse. It�s worth keeping in mind that there is an election coming up and that the ballot and your wallet are inextricably linked. The choices are clear – between candidates who will continue the downward trend for young people and candidates who may actually improve things for them.

Consider what has been happening with college tuition and financial aid. An unprecedented 28 percent of 25- to 29-year-olds reported holding a bachelor�s degree at the last Census. But for that leg-up into middle class comfort, they paid unprecedented tuition, which, according to the College Board, has shot up 47 percent at public universities and 42 percent at private ones in the last decade. Last year alone, tuition at the average public college jumped 14 percent, while state budget cuts to education were among the most severe in decades.

As tuition skyrockets, financial aid has become as elusive as that needle in the proverbial haystack. In the 1970s, the Pell Grant, a rock for low-income students, covered more than 80 percent of the cost of tuition at a public university, but today it pays less than 40 percent, according to the U.S. Public Interest Research Group�s Higher Education Project. And the Bush Administration�s proposed 2005 budget freezes spending on the grants and other crucial student aid for the third year in a row. Under that budget, which amounts to a 5 percent cut if you factor in inflation, 8,000 fewer students get a Pell Grant this year compared to last year.

With grants hard to come by, most students have to borrow on their degree. Loans now account for 60 percent of Joe Student�s financial aid, with the average grad racking up $18,900 in student loans. And with credit card touts on most campuses, Joe and Jane toss their caps an extra couple of thousand dollars in the red.

Lugging their hard-earned debt as they fumble for the bottom rung of the corporate ladder, graduates are finding that the jobs just aren�t there. The employment rate for recent college grads had fallen more steeply than any time since 1979, according to the Economic Policy Institute. The same was true for college grads of all ages. Meanwhile salaries just haven't kept up with swelling debt or even the cost of living. Between 2001 and 2003, real hourly wages declined for the first time in more than a decade; before that they had grown at just 3 percent a year since the mid 1990s.

And even if Jane Grad finds a steady – albeit lower-paying – income, the perks that smoothed her parents� climb to economic security have gone the way of the pet rock.

Take health insurance. Once out of college, she�s no longer covered under her parents' plan, and access to cheaper student plans dries up. The chances of getting a job with benefits look scarcely more promising than lotto odds. "The kinds of jobs you're eligible for are the kinds that often don't come with health insurance," said Sara Collins, an economist for the Commonwealth Fund, a nonprofit based in New York City.

Since 1987, the number of uninsured young adults has grown at twice the rate of older adults, even though the demographic itself is shrinking. Nearly 18 million adults under 35 went without insurance for all of 2002, the most recent year for which statistics are available – an increase of 1.2 million from the year before. Half were uninsured for some part of 2002.

Saddled with loans and lacking benefits, young adults must choose between health insurance and other expenses. They "are in a stage where people have debts from school, they are trying to buy a house, and that seems more important than paying for health insurance, which might cost multiple thousands each year," said Robert Blendon, a professor of health policy and political analysis at Harvard University.

Though the young are mostly healthy, one misstep can mean a mountain of new debt. A survey published in May by the Commonwealth Fund found that of the uninsured between the ages of 19 and 29, half had trouble making payments, had been contacted by a collection agency, or had modified their lifestyles to pay off medical bills.

And the cost hardly stops with lost purchasing power. The same survey found that more than half of those young and not covered had gone without needed medical care in the last year, which included not seeing a doctor, failing to fill a prescription, or skipping a recommended medical test, treatment, or follow-up visit.

What once seemed the just desserts of hard work – a good job, health care, your own place, a family – now feel more like numbers in a game of roulette. Put all your money on buying a house then trip going down the stairs and you�re tens of thousands of dollars in the hole and no way to dig yourself out.

Bringing marriage and children into the mix simply raises the stakes. With both partners working just to pay off the mortgage, the $4,000-plus a year per child for daycare, not to mention their schooling and health care, leaves nothing for a rainy day.

So, as Nov. 2 looms, how are the candidates responding to the collective sputtering of the tens of millions of 20-somethings trying to keep their head above the water?

Democratic nominee John Kerry has promised health care reform that should help ease the burden on all uninsured, including those just starting out. His proposed combo of tax credits, new group options for individuals, and other reforms promise to lower premiums and increase coverage to 60 percent of the 45 million Americans currently without health insurance. He also pledges to offer a new tuition tax credit of up to $4,000 and a service option that would allow students to fund their education through national service, as teachers in the inner city, for example.

While George Bush is not stumping on promises of increased higher education spending, he has pledged tax credits for low-income individuals to boost healthcare coverage. Those credits will help only an estimated one in ten of those without insurance, however, and as such, will do little for the average college grad.

In general, politicians don't have any grand schemes to help the young get back on their feet. That's probably because young adults are a group that doesn't have a lot of pull in politics. �Young people are least likely to vote and least likely to have money to make campaign contributions�I think it�s reflected in the lack of sensitivity to needs of 20-somethings,� said Blair Horner, legislative director of New York Public Interest Research Group. �They tend to be the least politically organized.�

With that in mind, rather than pining for the good old days and spinning the roulette wheel, maybe the solution is to get in the game.