Student loans: Obama's reforms won't help the middle class

November 07, 2011|Susan Reimer

The time of year for SAT scores and college visits is upon us, and high school seniors everywhere are trying to find a college they like that will have them.

News last week that college loan debt reached an all-time high for 2010 graduates — an average of $25,250 — makes the most important question in this process not "Where will I go?" but "How will I pay for it?"

Or, perhaps, who will pay for it.

I was the first in my family to go to college, and among the first to pay for it with federally guaranteed student loans. When I graduated from a public college, having paid out-of-state tuition, I owed less than $11,000 for my four-year degree.

By the time I retired that loan 10 years later, my monthly payment of $63 was lower than my phone bill. Lower, in fact, than any monthly bill I owed. My parents paid nothing, unless you count the $5 bill my mother sent me every week.

When my daughter graduated from a state school in 2008 — also having been charged out-of-state tuition — she had a student loan bill not much more than mine had been.

My husband and I, however, are paying the balance of her college costs, and the monthly payment on those loans is second only to the mortgage — and not by much. For what we spent on her degree, we could have purchased a second home at the beach.

That's why the student loan numbers in last week's report by the Project on Student Debt are deceiving: They do not include what the parents owe.

So, when William McGurn writes in The Wall Street Journal that a student's average college debt "is about the price of a new Toyota Prius," he is not counting the carload of college debt many parents are carrying into their twilight years.

All of this is enough to drive mom and dad out into the streets with the kids of the Occupy movement, who are outraged at, among other things, how much they paid to be among the highly educated unemployed.

Many of us consider educating the children we bring into this world part of the deal. Like food, clothing and shelter. And those of us who went to college ourselves consider a four-year degree to be a given.

We valued the college experience for ourselves, but more important, we expect it to make a difference in our children's earnings over a lifetime. So we borrow what we need to make it happen.

President Barack Obama has ordered changes to the federal student loan programs, to limit the monthly payments for certain borrowers based on their income and then forgive the debt after 20 years. But this is of almost no help to the middle class — the students whose families earn more than $100,000 but who still must borrow to pay for college. And that represents more than a third of the kids in school.

Compounding the mystery of how to pay for all that education are the questions about what students (and parents) are getting for their money.

A recent study titled "Academically Adrift," which followed 3,000 students on 29 campuses, found that after two years, 45 percent showed no signs of having learned a thing. And at the end of four years, 36 percent of the students showed no significant gain in knowledge.

The study also found that more than a third of the students studied fewer than five hours a week and still earned a grade-point average of better than 3.0.

If I am reading this right, we are borrowing huge sums for our children to not study very much but still get great grades, only to graduate and not find a job because they are at the slacker end of the global workforce.

If anything, this makes the case for apprenticing the kids to the local silversmith or the town blacksmith at about age 15. After a decade of indentured servitude, there might at least be a job waiting.

Susan Reimer's column appears Mondays. Her email is susan.reimer@baltsun.com.

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