The news: College is beginning anew for millions of students across the U.S., but HBO's John Oliver had a sobering reminder for them on this week's Last Week Tonight: Over 70% of them will graduate with student debt, and the grand total owed in student loans has surpassed $1 trillion.
Or, more to the point: "Essentially, student debt is like HPV. If you go to college, you're almost certainly going to get it. And if you do, it will follow you for the rest of your life. ... Like LBJ's testicles, the federal student loan program has now swollen to uncomfortable proportions."
Oliver chastises states for decreasing their spending on higher education by 23%, helping trigger a 28% growth in four-year public tuition since the 2007-08 school year. He also harshly criticized for-profit colleges, which account for 31% of student loans despite only comprising 13% of the total number of students in higher education — a situation he called "way out of proportion" and blamed on higher tuition and fee rates.
"If you're wondering why they charge so much, it has nothing to do with the quality of education," Oliver says, pointing out that private colleges generally spend two-and-a-half times as much on sales and marketing than teachers.
Then, the kicker: Oliver tracks down a class of 2007 engineering student used to promote ITT Technical Institute in commercials and discovers that out of 115 students, just 27 graduated and only 13 found jobs in their field.
"Everyone else would have been genuinely been better off studying engineering at Hogwarts, because at least that way they have a fucking owl to show for it," Oliver complains.
The background: Oliver is right to chastise America's horribly unfair student-debt situation. The U.S. higher education system still differs dramatically from many other advanced countries that offer totally free or capped tuition to public, while poor regulatory controls ensure that the co-signer agreements used in 90% of student loans are ripe for abusive tactics, such as unnecessary foreclosures.
Private colleges hold just $150 billion of the estimated $1.2 trillion student debt pile, but generate a disproportionate share of complaints. The National Bureau of Economic Research found that students from for-profit schools end up with much higher debt, have more trouble finding work and earn less when they do than those who graduate from nonprofits. The gap is pretty big: For-profit students earn $1,800-2,000 less annually, and the gap in employment lasts for more than six years after graduation.
What's more, the massive federal subsidies pouring into loan programs would probably generate much more value if they were used to just pay for public college directly, without a financial middleman. As Mic wrote back in April:
As Think Progress noted in January, public college tuition costs came in at $62.6 billion in 2012, less than what the government spends to subsidize the cost of college through "grants, tax breaks and work-study funds," which come to around $69 billion. So it might actually make more sense to stomach the bill and provide free federally-funded college for all public system students, pairing any such legislation with built-in cost control measures. Or the federal government could implement college savings accounts at birth which come with federal matching funds, taking the pressure off of the nation's poor to afford a better life for their children.
Fortunately, Oliver has some advice for college students: "Find out whoever the Winklevoss twins of your school are and steal their idea for a website." Hey, it worked for Mark Zuckerberg.