Some statistics just make one roll one’s eyes. Like this one: The total U.S. student loan debt is more than $1 trillion, and is incurring interest at 3.4 percent, a rate likely to double.
According to law professor Glenn Harlan Reynolds of the University of Tennessee, a lot of that debt probably won’t be paid off for many years. A primary reason for that is that college degrees, despite propaganda from colleges, don’t always lead to good-paying jobs.
A degree in gender issues, for example, Reynolds writes, is seldom rewarded in the marketplace, while degrees in engineering and other in-demand skills do lead to lucrative careers. However, the tuition for both courses of study in the same school is about the same.
But regardless of what one’s career after graduation might pay, those who chose to go into debt for college are likely to have to put off a new house or a new car until the student loan is paid off.
Maybe a house or car purchase will have to be put off indefinitely if the student loan is very far in arrears. Student loans can’t be discharged in bankruptcy, so lenders know they wouldn’t be first in line should a borrower choose or be forced to go bankrupt.
As soon as the student loan programs began, colleges began raising their tuitions, because like all economic entities, colleges follow the money. And the colleges themselves often used the money foolishly, creating new jobs for largely unneeded administrators instead of hiring more teachers to educate their students. College tuitions are continuing to rise, but it seems to take longer and longer (and cost more and more) for most students to finish.
But here’s some good news: Most college loans right now are current — although 12 percent are more than 90 days overdue. Let’s hope, however, that statistic gets better.