Student Loan Debt Causes Market Crash
September 19, 2016 • 92 views
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Many question whether to go to higher education or work right out of high school due to high costs. Students through out the United States are facing this challenge daily. One of the questions many of us have is why has college cost increased so rapidly.
Ronald Ehrenberg is an economist who wrote the book “Tuition Rising”. He points out the reality that universities have been increasing tuition by 2 to 3 percentage points faster than the rate of inflation since around 1980. Ehrenberg believes that these inflation rates cannot continue without consequences in the future.
Students during and or after they graduate college are filing bankruptcy or are getting jobs that just are not paying off their loans.
With this last election many argue that there cannot be free college. Of course not, but the cost of higher education cannot continue to rise as it has been.
According to state general funding statistics in 1968 for Berkley College for resident students had to pay $300 per year and nonresident students $1200. The state of California would fund approximately 32 percentage of college tuition in 1974. Undergrads in 1985 would pay a total $1296. Then in the 90’s tuition increased to $4354 and continues to go up from there over year after year.
What will happens when no one can afford to go to school anymore? The United State would go through another market crash due to too many people not being able to pay off their loans just like the housing market crash.
Ehrenberg argues in his novel that universities the heads of these universities have a hunger for new, bigger, or better academic programs. Many of these universities are building luxurious dorm options for students to attract more and more students to go to their school. This concept goes throughout the whole campuses. Universities are spending like corporations to look bigger and better than their competition.
If colleges focused on they’re academics rather than funding sports or trying to make their college look better than the others. Tuition could be decreased significantly.
Higher education is important and should have a price to pay, but not the cost of students not being able to live while going to college due to cost of tuition. If students cannot afford to pay off student loans, what was the point of going to college to get a job that cannot pay off student debt?
Colleges should not be run like a corporation, universities should not cost what the Hilton hotel would. Universities need to be about education again and not money.