Guess Who's To Blame For Your Thousands Of Dollars in Loan Debt?

Most kids are told that college is a path to their dream job but once they’ve graduated many can’t find a job anywhere: not at a bank, a newspaper, or a Dairy Queen.

This whole generation of American youth,those of us who bought into this narrative and now owe over a trillion dollars in student loans face devastating fresh-out-of-college unemployment rates, have fallen victim to a perverse capitalization of the American Dream.

What was called education reform in 2010 now looks like a system in which colleges are free (and encouraged) to jack their tuition for easy profit without fear of market consequences while government lenders pocket the revenue from fees and interest at the expense of students struggling to survive. The “value of an education” has begun to smell an awful lot like the value of the townhouse mortgage offered so enthusiastically in 2008.While to point a single finger of responsibility would greatly obscure the network of corruption that perpetuates this scam, there are two sorts of folks you can be sure are profiting off of the stolen tuition dollars of millennials: college administrators and the political representatives they have in their pockets.

The college market is anything but free. There is ample competition and ample growth but — because of the nature of the federal government’s involvement — money isn’t the factor that universities have to check for in terms of attracting students. As the lending limit for government loans goes up and up thanks to sketchy lobbying efforts by the education industry itself, tuition prices are raised in tandem. Prestige is the new currency — each university is fighting to appear the best to the consumer via how high they can climb on the US News rankings.

With these higher tuition prices, board trustees and college administrators look at each other and shrug, “Well, what now?” Having a high tuition naturally makes you appear more prestigious than your peers, so the unchecked market offers colleges both more cash and more prestige in the same stroke. And where does this extra cash end up going? Right where no student wants it to go: six-figure hires in the administration, pay raises for those already there, and superfluous capital projects to add to campus polish. 

Regarding the new hires, anyone involved in on-campus social activism will let out a prolonged sigh if you mention the skyrocketing trend of needless administrative hires in college bureaucracies. Benjamin Ginsburg comments in the Washington Monthly that a 10 percent cut in administration staff would "save millions of dollars but would have no effect whatsoever on the operations of most campuses.” Similarly, median salaries for senior college administrators are already in the hundreds of thousands, and even associate deans typically break six figures — all while colleges like Howard and University of Tennessee raise tuition and spike executive pay in tandem.

Capital projects are a more unique case of flippant tuition appropriation, especially in that the more prestigious a university is — say, if they’re a part of a wealthy and world-adulated athletic conference — the more green they’ll pump into frivolous, surface development projects.

Ivy Leagues are often — rightly so — hailed for their commitments to making education affordable, basically because they have the endowments to do so. None of them break free from this corrupt system, though. Recently, Harvard has been spearheading an expansion of its business school campus further into Allston, MA, via a 10-year plan that would include nine construction projects including “a new basketball stadium, a science complex, and several academic buildings for HBS.” Setting aside the precedent that similar projects at Harvard Law School have been based in part on justifications as laughably flimsy (to those of us without hundreds of millions in our pockets) as a need to correct the “mismatch between classroom size and section size,” the Allston expansion seems purely to be a real estate decision, from the perspective of folks on every side of the line. Allston/Boston residents are even shouting back that the project means Harvard has sidetracked actual community development ventures that wouldn’t just be billions of (tuition) dollars in prestige-mining. One of the plan’s earliest steps, moving just a small set of stem-cell researchers from their current campus location to a new science complex in Allston — on the basis that it would maybe catalyze collaboration between business and science — would cost $71 million. That’s enough to alleviate costs of board and lodging for every undergraduate that year. But students from financially-insecure backgrounds don’t bring schools prestige like big, sexy new campuses across the Charles River do.

In the end, however, it isn’t college admins who are tossing young people loans to cover these insane tuition figures (up 500% since 1985). Nope, that’s Wall Street and Washington, and more the latter than the former since 2010 when the Obama administration began its accelerating expansion of the Pell Grant program. Money doesn’t grow on trees, but it does grow on unpaid loan debt — and now the federal government is the direct beneficiary of the failure of America’s young people to thrive in an impossible economy. . In a recent Rolling Stone essay, financial journalist Matt Taibbi outlined the entirety of the “government-sponsored predatory-lending program” that makes all this possible. Calling the government's student loan profits a "crude backdoor tax increase" instead of the investment it's purported to be.

Perhaps it’s unfair to draw direct causality between, say, the average congressperson’s salary and the projected $185 billion that the U.S. government will make on fees and interest in the next 10 years. Are they really benefiting from this theft? From a different angle, think about the effects of in-office congresspeople having extra funds at their disposal: they can vote to throw it at the deficit, and whether that will help alleviate our national debt (it won’t) or not, the vote itself could at least win political points ergo job security for that politician. 

Consider the dependency the federal loan program creates between young borrowers and their representatives. When debt engulfs your entire life, you find yourself on the side of any politician offering even the tiniest carrot of salvation. If a former Harvard professor-turned-Massachusetts senator passionately leads a fight in support of maintaining a 3.4% interest rate on loan payback, of course a student borrower is going to raise their fist in support. They’ll campaign enthusiastically, even though that is so nominally a step in the right direction, such a questionable baseline in terms of maintaining some semblance of morality in this system, especially when compared to countries like New Zealand whose government student loan programs run interest of — wait for it — precisely 0% for NZ residents.

A few more million dollars a year from in tuition hikes don't matter to universities — that’s why it goes to executive raises, renting expensive artwork, and building brand new buildings that look pretty in admissions guides.Those extra billions are funding the system that keeps congressional salaries ever-increasing.

And to a student graduating today to an 8% unemployment rate, an average starting salary of $40k (STEM or not), and an average student loan debt of over $26 thousand, these numbers are tyrannical.

Every time a board trustee glances at the tuition revenue figures,shrugs, and casts their vote to give the new provost another zero on their paycheck, the lives of our generation are robbed. Sorry, you’ll just have to pick up another three shifts a week to cover the extra hundred dollars a month in loan payments, while the dean who dismissed your concerns about sexual assault policy gets a new housing allowance. It all sounds like something a good deal more sinister, and a lot more nightmarish, than any American dream.