The fleecing of our young 

Five years ago, I wrote a story titled "College Is For Suckers." I argued that the costs of tuition, dorms and fees had risen so high that the additional income you'd earn as a college graduate -- compared to that by going straight to work after high school -- wouldn't make up for the massive student-loan debts you'd acquire.

The magazine that ran my piece is no more. Both books that published it are out of print. But the problem of crippling student-loan debt has gotten worse.

The pre-bankrupting of America's best and brightest, the young men and women who attend private colleges and public universities, is one of our nation's enduring, quiet scandals. Momentarily breaking the silence was a Jan. 28 New York Times profile of young adults who, because of their student loans, are forced to choose jobs solely based on pay.

Margot Miles, a legal secretary who borrowed $25,000 to attend UPenn, wants to go to law school but "just can't imagine taking out any more loans." Anisa Brophy, an aspiring cartoonist, ran up a $70,000 tab attending Wilson College in Pennsylvania. Even Connie Chavez, whose $10,000 student-loan bill to attend Hofstra doesn't seem so bad, "has virtually given up on her dream of going to business school."

Priced out of the system

These kids will not take low-paying jobs teaching in the inner cities. They won't join the Peace Corps. If they find themselves with a few extra hours here and there, they won't volunteer at a homeless shelter -- they'll take a second job. When young people defer their dreams, when options vanish, America loses.

Average tuition and fees at a private college or university is $18,000 and rising at twice the inflation rate. Meanwhile, what students call "real" financial aid -- grants and scholarships, not loans -- keeps falling. The result is twofold. The Rand Corporation estimates that 6 million Americans will be "priced out of the system" over the next two decades. And for those who bite the bullet, more students than ever (46 percent in 1990, 70 percent in 2000) end up taking out college loans.

The U.S. college industry churns out about a million newly minted graduates every year. On average, they owe $27,600 to creditors they can't shake even by declaring bankruptcy. Depending on the type of loan, a typical 21-year-old faces a minimum monthly payment of from $350 to $420 for the next 10 years.

Anisa Brophy, the would-be cartoonist, is in for at least $880 a month. If debtees have trouble paying, they can apply for a temporary deferment, but the interest keeps piling on.

Men with bad beards

Why do people borrow so much at such an early age? The College Board claims that college grads earn $1 million more during their lifetimes than those with high-school degrees. And most half-decent jobs -- positions in corporate offices, not just professional occupations like law and medicine -- require that you have a college degree just to be considered.

You may be thinking: tough bananas. This is America. If you're stupid enough to borrow more dough than the average Joe pays for a house to listen to men with bad beards expound on Proust, it's your own overeducated fault that you're stuck with the bills. So what if 17-year-olds don't know jack about loan indentures, future salaries, or what they want to do for a living?

But that's horse manure.

As more and more employers require college degrees, more and more people will seek them. During the age of advancing globalization, national leaders say, Americans need more education to compete. Moreover, student loans are big business. Citibank's Student Loan Marketing Association, which holds outstanding student loans totaling $21 billion, recently announced that it turned a profit of $176 million last year, a 30 percent increase over 2001.

$35,000 is the norm

Student-loan debt has become even more burdensome as the United States enters its third consecutive year of recession. Fifty-nine percent of degreed job seekers have been looking for work for at least three months, some for as long as a year.

"Job seekers frustrated by last year's tough market have low expectations about this year's job market," says Michael Caggiano of the TrueCareers jobs board.

If and when they find a job, the pay isn't all that great. The National Association of Colleges and Employers says that average starting salaries for the Class of 2002 range from $27,000 for political science majors to $51,000 for computer programmers. Around $35,000 is the national norm.

After taxes, that works out to about $2,000 a month -- the rent on a tiny apartment in a borderline neighborhood in New York or San Francisco. When a fifth of your paycheck goes to student loans, it's hard to afford a car, much less purchase a first home. Economists looking for explanations for declining sales of big-ticket items might start here.

College tuition is free or nominal in most industrialized, and many Third World, countries. The United States' insistence that students assume huge debts to pay for their college education is unusual enough that the Chinese government included it in its 2001 report of American human rights violations.

Doing the numbers

Until the United States joins the civilized world, our big-spending government can make things easier on 20-something graduates by abolishing the student-loan industry.

Eliminating the debt racket wouldn't be difficult. Calling off the invasion of Iraq, for instance, would save an estimated $200 billion -- that's six years of fiscally emancipated youth right there. Eliminating last year's $1.5 trillion tax cut -- money that would have gone to rich people who won't miss it -- would pay off everyone's student loans for the next 50 years.

At age 39, I'm just $400 away from paying off my last student loan. Nonetheless, I could use the break.

Ted Rall is the author of "Gas War: The Truth Behind the American Occupation of Afghanistan" an analysis of the Trans-Afghanistan Pipeline and the motivations behind the war on terrorism.


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