What self-respecting parent would give their kid a credit card if they knew they were going to max it out and not be able to pay it back? Hopefully, no one. In fact, as a responsible parent you would probably teach your children the opposite habit--responsibility.
This paternal irresponsibility is what is occurring on a larger scale with the federal government and the student loan industry. President Obama has earned himself a failing grade in responsible parenting.
FICO released a new study that analyzed 10 million credit files to find trends within the student loan industry. The group concluded that the student loan industry is on an unsustainable path (but I think we knew that already).
Student loan debt has exploded under this President. This past year, student loan debt soared above $1 trillion, surpassing credit card debt--$782 billion--by more than $200 billion. Under President Obama, average graduating student loan debt is up 16%.
There are two main reasons for these spikes: 1. President Obama has tricked young Americans into believing that college is required in order to find a good job, and 2. Higher education fat cats are milking the endless amounts of federal money coming in by jacking up tuition prices.
Pressuring young Americans to attend college has been President Obama’s agenda from the beginning. In his 2009 State of the Union Address, he said:
“I ask every American to commit to at least one year or more of higher education or career training. This can be community college or a four-year school; vocational training or an apprenticeship. But every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It's not just quitting on yourself, it's quitting on your country. That's why we will provide the support necessary for all young Americans to complete college and meet a new goal: By 2020, America will once again have the highest proportion of college graduates in the world.”
And they’re on the verge of reaching that goal, but the results are anything but stellar.
Since the President took office and nationalized the student loan industry, college enrollment has increased 15 percent. While this may look great on paper, many students and post-graduates are living in the hell of unintended consequences--and they can’t be ignored.
Yes, the amount of young Americans attending college has increased in the last four years, but college tuition has increased at a much higher rate of 25 percent. The tsunami of federal student loan aid that is flooding the pockets of college administrators and staff has come with no strings attached. College administrators have no incentive to keep tuition low while the federal government keeps lining their pockets.
Students are having to take out increasing amounts of student loans to keep up with the increase in tuition. In 2007, average student loan debt was $17,233. Today it is $27,253--an increase of 58 percent in just seven years.
And for what? Another study released by the Center for College Affordability and Productivity reported that college graduates are taking jobs that don’t require college degrees. The group reported that 48 percent of 2010 graduates have jobs that don’t require a bachelor’s degree, while 38 percent have jobs that don’t require a high school degree.
A college degree used to mean that a person would earn $1 million more on average over a lifetime. Now those earnings have shrunk to $300,000--and that’s if they are lucky to find a job. Recent college graduates are entering a market where they are competing for jobs with unemployed Americans with more experience. They aren’t having much luck. 53 percent of recent graduates are unemployed or underemployed. Student loan delinquency rates have followed this trend, increasing 22 percent in the last two years.
Unfortunately, these numbers will continue to skyrocket as long as President Obama and his allies are running the show and winning the arguments. Young Americans will continue to fall for President Obama’s education propaganda and taking out massive loans they can’t afford. If parents convinced their kids to bankrupt themselves, we’d call it child abuse. When President Obama does it, somehow it’s called “student aid”--which is nothing short of immoral.