College Loans are Next Debt Crisis (Opinion)

Tim Goral's picture
Tuesday, May 29, 2012

Marlins Park, financed by bonds that will take four decades and $2.4 billion to pay off, makes a perfect setting for commencement exercises. Vice President Joe Biden, when he addresses a happy throng of graduates from Cypress Bay High School in that fancy new baseball stadium on June 4, will be looking out at the unwitting perpetrators of the next great debt crisis.

Biden, nice guy that he is, probably won’t open with, “Hello, you likely deadbeats.” Maybe he should.

Most of the students from the big suburban high school in Weston have college plans. But the next time these kids queue up for diplomas, they’ll also be getting hefty IOUs. Plus interest charges.

Some 62 percent of the grads from U.S. public universities emerge with both a diploma and debt, according to figures compiled by the federal Department of Education’s Project on Student Debt. About 72 percent of grads from private nonprofit universities owe money. An astounding 96 percent of the kids who attend for-profit schools venture out into the real world as debtors.

The study was conducted in 2008. It’s only gotten worse amid a recession and slow, slow recovery, as state legislatures hack away at higher education allocations.

If grads from Cypress Bay High attend one of Florida’s universities this fall, their freshman year will coincide with a $300 million cut in state funding. Along with a 15 percent pop in tuition and diminished help from Bright Futures scholarships.

 

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