College has been a key and crucial part of American society since its founding: from early universities founded by Puritans and Catholics, the idea that faith and reason were intertwined and could be harmonized has existed since the beginning.
However, a special emphasis was placed on the pursuit of scientific knowledge, eventually expanding the scope of what college taught into sociology and philosophy with the new purpose of educating the masses. Yet as it turns out, the masses have a hard time affording large lump sum payments such as tuition, leading to the advent of the college loan. “Higher education in America should be a right for all, not a privilege for the few,” Senator Bernie Sanders of Vermont said.
The argument for enabling near universal college through loans rests on the basic premise that children should be prepared for the future and be able to have a profitable skill set when entering the workforce, and since there has been an evident decline in the performance of students in school, then more education is needed. The logical conclusion to this line of thinking, outside of unlikely governmental action due to the Trump Administration’s political values, would be to push college and to pursue college at all costs. College is generally seen as the logical continuation of education based on the standardization of SATs in schools as well as federal student loans.
This is however not an argument for college; in fact, it is an argument for the reformation of America’s broken public school system which over-spends and under performs. The solution to systemic problems is not to make the system bigger by allowing more institutions to be lumped in with the same inefficient systems, it’s to make the original problem system better. Therefore, the solution to public schools being inefficient is not to allow the same students that are underperforming according to past standards to take on massive debt, instead, it is to limit those loans.
Student loans make college easily accessible to the masses, as stated earlier, but have second, third and fourth order effects than presented by most debaters. The first effect of these loans is actually making college more exclusive and expensive, and to prove this, the incentive structures for such actions and the evidence will be reviewed.
Let’s start with the incentive structures: generally, as a general practice, businesses will charge as much as they can within a certain bounds, those bounds being, at the lowest, just above production cost and, at the highest, just below what the customer is willing to pay. So it stands to reason that if a customer can pay more, the business will charge more because the whole goal of the business is to make money. Colleges, being businesses and oriented toward producing a profit, will charge a higher tuition if they know the prospective students will be able to afford the tuition, bringing in the concept of student loans.
Generally families already have a college fund or an amount of money set aside for their child’s future, but most of the time that amount isn’t enough to fully bring them into college, so they take student loans. The Urban Institute reports about 40% of undergraduates take student loans and 70% of bachelor degree students do the same. These student loans artificially increase the price a person is willing to pay for college, and combined with more social pressure and expectation to go to college, it is most likely that one would take these loans out.
Now the analysis of the actual empirical evidence: historically, college tuition has risen much faster than actual inflation, for example, rising 57% in 1987 while inflation only rose 27%. In fact, a Federal Reserve Bank of New York study found student tuitions have been rising 60 cents on every dollar of increased student loans. The structure of campuses have grown, adding more levels of bureaucracy to get things approved and more activities and courses, which could be argued have a lack of importance toward a student succeeding in society, such as University of Georgia’s “History and Analysis of Rock Music” class.
As I said before, these loans have second and third order effects as well, and one of the second order effects is that of degree inflation, a common problem among the whole world. At the advent of college, degrees were supposed to be a certification of talent and an endorsement of one’s abilities, yet as college degrees were expanded to more people, these degrees lost their value.
The biggest reason for this loss of value is the increase of supply, also known as the increase of the number of degree holders: post World War Two America had just under 5% college graduation rate while 2015 America had 33% graduation rate. Generally the more you have of something, the less valuable it is; that is why gold is more expensive than gravel. Now that you have a third of the population with the degree, the degree, to the employer for relatively middle class or high paying jobs, seems more like the necessity of the ideal employee than something extra that proves that they are a smart person.
Throughout the same period of time, 1940-2015, student loans have gotten more accessible and available, allowing this influx of people into college, leading to this increase in supply. Combined with the swift increase in college price and loan amounts, thus leading to greater debt, this devaluation of the degree makes loans feel like using a dirty bandage on an open wound: yes it will stop the bleeding, but the wound could easily be affected and necessitate amputation.
Now that we have reviewed the ever so slightly bleak situations college loans have brought on, let us look back to a time where college was not the make or break of certain jobs: in the 1950s, there were definitely still jobs that required a college degree, no doubt, but those jobs were few and far between. For example, 50% of professional and technical workers had a college degree in 1950, yet that rose 20% into the modern day. Managers who had college degrees were about 10% of the population, sales workers about the same, clerical workers had slightly less. There are endless examples of these jobs rising in percentage of degree holders, yet for most of the jobs, the information needed to conduct the job has not risen much (sales workers for example).
Yet it is clear that the pursuit of college is not necessarily fruitless nor a waste of one’s time, rather one should consider if college is necessary for one’s job. An interested student can be a good salesman or a mechanic without a college degree and, at most, other forms of schooling, like trade school, or apprenticeship. If you do not need college for your future career, then think about not taking out loans that leave you with hundreds of thousands in debt and a cool piece of paper.
When all is said and done, it is important to remember that colleges and universities aren’t schools purely based on the pursuit of knowledge, they are businesses with boards of investors. These schools don’t want what is best for you, rather they want what is best for your pockets, so the next time you consider taking out a loan for college, ask yourself this: is this degree worth the debt? “Academics are a special-interest group. Their special interest is to get their production costs paid for by other people [notably the taxpayers] and to give their product a good image so that it will sell. Whether their product actually helps the consumer afterwards is secondary, at best,” Economist Thomas Sowell said.
