The Next Bubble Is About to Burst: College Grads Face Dwindling Jobs and Mounting Loans
It's the beginning of summer: warmer weather, longer days, the end of the school year. And that means graduation for thousands of young people across the U.S.; graduation with more student debt than ever before, and into a job market that is anything but promising.
Young people between the ages of 16 and 24 face an unemployment rate nearly twice that of the rest of the population, according to data from the Economic Policy Institute. 2010's 18.4 percent rate for youth was the worst in the 60 years that economists have collected such data. ColorLines notes that in 2010, 8.4 percent of white college graduates were unemployed, 13.8 percent of Latino graduates, and a dismal 19 percent of black graduates.
Those bright, shiny new degrees simply aren't worth the paper they're printed on all too often. The cost of a college degree is up some 3,400 percent since 1972, but as we all know too well, household incomes haven't increased by anything close to that number -- not for the bottom 99 percent of us, anyway.
Pell Grants for students have shrunk drastically in relation to the ballooning cost of a four-year college, and Paul Ryan wants to cut them even more, pushing some 1.4 million students into loans, more of which come each year from private lenders with little to no accountability.
New legislation, introduced last week in the House and Senate, would attempt to put a bit of control on those private lenders, restoring the bankruptcy rules so that private student loans may be discharged through bankruptcy. Currently, private as well as government-issued and guaranteed loans will stick with you even through bankruptcy proceedings, saddling far too many graduates with debt for life.
Still, bankruptcy reform is hardly a solution to the problems at hand. Imagine 18 percent of college graduates declaring bankruptcy when they can't find a job, upon graduation, that allows them to make payments on their loans?
Small wonder that many are calling the student loan crisis a bubble possibly worse than the credit card or housing bubbles. Small wonder that when polled by the Pew Research Center and the Chronicle of Higher Education, 57 percent of Americans said higher education doesn't provide a good value, and 75 percent said it is too expensive for most to afford. Yet the lucky graduates who do have jobs still make, on average, $20,000 a year more than those without degrees. It seems that higher education, as with so much else in this society, is turning into a way to keep those who already have money making more of it.
In other words, all of Obama's declarations that we will "win the future" through education, notes Kai Wright and Stokely Baksh at ColorLines, mean little if there are no jobs for those graduates even with their sparkling credentials.
Even David Brooks at the New York Times this week has some sympathy for the latest crop of recession graduates, noting that their education hasn't prepared them for the world they face. "No one would design a system of extreme supervision to prepare people for a decade of extreme openness," he says, but then of course goes on to blame "baby boomer theology" for the struggle of today's youth.
Paul Mason at the BBC calls them "the graduates with no future," and he's been following the role they've played in protests not only in Britain but across the Arab world, particularly in the revolutions in Egypt and Tunisia.
After all, what's left for an educated generation, brought up on social networking tools, to do but apply those tools to organizing protests? We haven't seen a student movement in the U.S. like the one in England yet, but we've seen the role of students in Wisconsin, Ohio, New Jersey and California.
Brooks would have us believe that "expressive individualism" is the problem with this downwardly mobile generation, but those same students he decries for their selfishness are busy using their skills to fight even more selfish governments, bent on cutting services for students, the poor and the elderly to give more money to those most selfish of all entities: corporations. Individualism is hardly the problem with the students -- it is, instead, the problem with the societies.
One thing is sure: a rising tide of unemployed, debt-ridden youth is not simply going to go away without action. If the federal and state governments don't do something soon, the "graduates with no future" may well bring the unrest here.