By Joe Sinagra | The Save Jersey Blog
You may have heard that students are refusing to repay their federal student loans as part of a protest designed to pressure the government into forgiving their debt, Save Jerseyans.
The problem? College graduates and students who default on their loans can lose their paychecks, tax refunds, or a portion of their Social Security benefits further down the road. Not paying back that debt can also ruin their credit, making it difficult to buy a house, car or even land a job. Interestingly, a large percentage of these Federal loans are encumbering seniors. Around 3 percent of U.S. households that are headed by a senior citizen now hold federal student debt, comprised largely of debt they took on to finance their own educations according to the GAO.
These are people who went to college, earned a degree and made decent money during their careers.
Graduates who earned master’s degree years ago have seen their finances dwindle away by illness, divorce, the cost of raising children, the housing bust, and the economic downturn and now want their loans forgiven because they can’t afford to pay them. The GAO report goes on to say that “[a]s the baby boomers continue to move into retirement, the number of older Americans with defaulted loans will only continue to increase.”
The cycle shows no signs of letting up. Younger graduates want a degree and have no problem doing whatever they need to do to obtain it, but now that it is time to pay the piper, they balk at the idea that they now have to pay back these loans. They say they can’t afford to pay the funds back because the economy is bad and they can’t get a good job. Well,Save Jerseyans, the economy has been bad for quite a few years now and I would think an educated person at some point would realize that their bills are getting higher and they need to stop accruing more liability and figure out how they are going to pay off their current obligations.
Since 2008, companies having been paying less for positions that previously were paying a lot more. It didn’t happened overnight, and it doesn’t take a rocket scientist to know that if 300,000 students looking to obtain a high paying position in a limited field, not everyone is going to get hired.
To be fair, there is a lot of misinformation out there peddled by self-interested for-profit institutions. Colleges feel they have no obligation to tell students that there aren’t that many openings for that high paying position students expect to get and many of them once graduated won’t get hired because somebody else beat them to it. Now students feel cheated because they have a $150,000 obligation and no way to pay it back; they need the money from the lesser paying job to live on.
New Jersey, by the way, ranks eighth in the country in terms of the highest amount of loan debt owed by its graduates.
Sixty-four percent of New Jersey’s graduates carried student loan debt and, in just New Jersey alone, more than 1.2 million people owe $30 billion in student loans.
On graduating from a four-year degree-granting college or university in New Jersey, the average graduate who received a bachelor’s degree also got a notice to start paying off an average of $30,000 in loans. Almost two-thirds of all graduates in the state left college with some sort of debt.
In 2011, Centenary College in Hackettstown all of its graduates left in debt. This may come as a surprise but one school that made the list with the lowest debt loads was Princeton University.
I disagree with those who say that a college degree no longer holds a justifiable value. It is still the best avenue to take in finding a job in many industries, but one should be realistic in what they expect to gain out of it particularly when it comes to selecting a school, major, and projected debt load. By 2020, 66 percent of the jobs in our state will require a certificate or a degree, while only 46 percent of the current population has one.
What’s wrong, in my opinion, is to have others who decided they couldn’t afford college and expecting them take up the slack to pay back the debt created by those who felt they needed that master’s degree.
Those that took jobs because they knew they couldn’t afford the price of college are going to be expected to pay for those graduates who want their loans forgiven. Somebody has to foot the freight either the students or the taxpayers, and as future taxpayers those same students will still pay.
This is the reverse of sharing the wealth, and I certainly don’t want to share someone else’s debt.
There are no free rides in life and if you want to ride around in a Mercedes or BMW, don’t expect those in a Nissan Versa to pay it off for you.