Recent college graduates live in a society whose work force is precariously on the brink of the most tragic financial crisis since the Great Depression.
The double whammy for them is in navigating pending college loan and interest payments while job markets in their fields of study decline.
The problem is that college graduates are increasingly being saddled with higher loan payments while having to deal with a disintegrating job market. Today's news is all about failing banks and other financial institutions, as the plight of jobless college graduates gets lost in the fray.
"They have yet to find real jobs in their field, so they're out there slinging hash to make ends meet. And then their loan payments come due," says Alan Collinge, founder of Student Loan Justice.
In her article "College Loan Slavery: Student Debt is Getting Way Out of Hand," Nan Mooney cites a College Board report stating that about 60 percent of 2007 college graduates had student debt, each taking on an average of $22,700 in loans.
Graduates are expected to begin repaying within six months, whether they have a job or not. Many of them will also face not only paying back fixed-rate federal loans but also high-interest private loans.
If students default on a loan, there goes their credit rating, and a bad credit rating can significantly reduce their chances of being employed.
Loan deferrals for illness or disability reasons are limited. All this, while interest charges continue to pile up.
Graduates unable to find adequate-paying employment can also face garnished wages, as well as liens against their property and bank accounts, if they default on loans. This can be a massive body blow, especially to younger people who haven't even had a chance to get their first bona fide job.
It gets worse. According to Mooney, author of "Not Keeping Up With Our Parents," the nation's underemployment rate – which includes not only the unemployed but also part-time workers – reached 11 percent this past September, the highest rate in 19 years.
Collinge sees the mixture of pricey private loans and a dicey job market as "a potentially toxic mix, one that could result in a wave of bad loans echoing what has already happened in the housing industry."
These days, Joe and Joanne Moneybucks, if their children are not complete high-school failures, will usually be able to afford their children's college education, where they will make contacts that will enhance their future.
I am old enough to remember when state and public universities were considered the backbone of the larger college picture. And, believe it or not, there was a time when one could snag a decent-paying job in this country with no more than a high-school education.
Even today, you don't have to have a high-priced college education to be able to construct a house, manage a farm, run a book shop, operate a child-care center or install a sewer system.
Only a generation ago, a student could attend a public university on basically what she or he had earned from full-time summer employment and some part-time employment while attending school. Those days are long gone.
This enormous financial and personal burden on college graduates is almost completely unique to American students, since most European universities are often both outstanding and charge minimal tuitions, while some even allow loan forgiveness after several years.
American colleges and universities are very overpriced compared to those in other Western countries. Further, our emphasis on perceived money-making degrees such as MBAs, engineering, computer science, architecture, medicine and law, devalues the importance of degrees in the humanities, art, culture, history, creative writing and other areas of study.
What are possible solutions to skyrocketing college expenses? Perhaps less punitive laws against defaulted school loans?...
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