I had a lot of help growing up. God knows I needed it. Uncles, Aunts, Grandparents, family friends, my mother’s boyfriend and eventually the man who would become her second husband and my step-father. They filled in a lot of gaps, and helped make sure I had good experiences. Tried to keep me on the straight and narrow and somehow, some of them combined to get me seven years of private school, without which…well, no need to speculate.
Someone else helped. Uncle Sam. It wasn’t much when I was a youngster: Food Stamps, SSDI for my mom for a time. But when I went to college, boy did it help. A total of $16,000 in Pell Grants and a lot of loan money at a really low interest rate. The Pell Grants alone would be worth $93,000 dollars today. But whichever rate you use, the US government has gotten that back MANY MANY times over.
The money that the government put into my education was an investment and it paid back. Not that I didn’t invest myself. I came out of school with about $35,000 in student loan debt. That’s about $200,000 in today’s dollars, so this was no free ride.
We never made an official deal, Uncle Sam and I, but the way it turned out, he would make a substantial investment, with the hope that I would pay it back many times over in taxes to the government. We both made smart choices. I invested in a course of study that would pay pretty decent money. Success all around.
But here is what has me concerned. It costs just as much to get a degree in education as it does in Computer Science. And god knows we need teachers. But teachers, are notoriously underpaid. There are other professions like this as well. Essential jobs, that require lots of education but don’t pay all that well. The economics on the return on investment don’t make sense for everyone.
So what’s happening? Eisenhower warned about the Military-Industrial complex. (Actually his speech writer warned about the Military-Industrial-Congressional complex, but Eisenhower scrubbed out the Congressional bit because he didn’t want to piss everyone off all at once.)
What he didn’t forsee was a different type of complex. I call it the University-Banking complex. Oh, what the hell, let’s call it the University-Banking-Congressional complex. We have set up this vicious cycle, at first with the best of intentions to make the kind of investments that Uncle Sam and I both benefited from. But as we know, when government money starts flying around, the hogs all line up at the trough.
The government puts money into the hands of students in the form of grants and loans. The banks, make the loans, because well, hell; it’s guaranteed money. It’s a can’t lose proposition. The universities can ramp up costs, because the students will keep coming because of the loans and grants. As the costs spiral up, the government injects more money into the system and the cycle continues. There is no circuit breaker. Universities can build ridiculous facilities and let costs go unchecked, banks can lend more and more money and they can’t lose.
Everyone is making money! Well, not everyone. Guess who is getting the shaft? Your average American kid and their average American taxpayer parents. Because, they don’t get enough grants to cover the tuition and must go to the banks. The amount of money they have to borrow is exorbitant.
The banks are making out like crazy. The universities are padding their endowments and young people are graduating with ridiculous amounts of debt.
The whole thing is like a pyramid scheme where the suckers on the bottom get stuck paying the bill. Look, I understand people being reluctant to support student loan forgiveness. But we created a system that was stacked against them. We need to reform the system. If universities ramp up their costs above a certain rate then they should be ineligible to provide government assistance to their students. We’re a capitalist country right? Why not let the schools bear the burden of their poor fiscal management. Will some fail? Like I said, we’re a capitalist country.
Meanwhile, we have a cohort of young people, our future, that are coming into a country where wages are not rising as fast as the cost it takes to obtain those wages. Education is important. People shouldn’t have to become indentured servants to obtain it. Plus, basic economic theory, you know the same theory that people trumpet when they try to lower taxes, says that all of that money that is going into loan repayment, would have a huge stimulus effect on the economy.
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I agree with most of what you say. Yes, banks need to have skin in the game. So should schools, they need to offer more useful curricula. We need as a society to make sure we understand the difference between education and training. But there are some assumptions built in. For example, how big is this problem really? So, I asked an AI:
Critical Analysis
• How Bad Is It?: The student debt crisis is real but uneven. Most borrowers (60%) owe less than $25,000, manageable for many with bachelor’s degrees (median income $60,000+). However, the 20% with $50,000+ and 7% with $100,000+ face significant burdens, especially in low-paying fields or without degrees. The 2% with $200,000+ debt are a small but extreme group, often in high-earning professions, though repayment can take decades.
• Widespread vs. Concentrated: High debt is not widespread among undergraduates at public colleges (where most students enroll). It’s concentrated among:
• Graduate students in professional programs (e.g., medicine, law).
• For-profit college attendees, who face high debt and low graduation rates.
• A small subset of private college undergraduates, including some at prestige schools, though aid mitigates this for many.
• Prestige Schools Narrative: The idea that high debt is mostly at elite schools is a myth. Ivy League and similar institutions enroll less than 1% of U.S. students and often have robust aid (e.g., Princeton covers 100% of demonstrated need). High debt is more common at mid-tier private colleges (less aid) and for-profit schools, not just “prestige” ones.
• Data Gaps: Sources like the Federal Reserve and NCES don’t fully break down debt by institution type and degree completion status for $100,000+ borrowers. Estimates for for-profit colleges are dated (2015–2016), and private loan data is underreported, potentially understating extreme debt.
• Skepticism: Establishment data may downplay the crisis by focusing on averages ($29,300) rather than the long tail of high debt. Conversely, media narratives overemphasize six-figure horror stories, which apply to only 7% of borrowers. The truth lies in the middle: high debt is a serious issue for a minority, worsened by for-profits and racial disparities.
Final Answer
• Severity: Student loan debt is a significant issue, but “ridiculously high” debt ($100,000+) affects a small minority (7% of borrowers, 3.2 million people), and extreme cases ($200,000+) are even rarer (2%, 900,000 borrowers). Most borrowers (60%) owe less than $25,000, but the 20% with $50,000+ face real challenges, especially in low-paying fields or without degrees.
• Prevalence: High debt is not widespread but concentrated among:
• Graduate students in professional programs (e.g., 70% of medical school graduates owe $100,000+).
• For-profit college attendees (26% owe $50,000+, with high default rates).
• A small subset of private college undergraduates, including some at mid-tier (not just prestige) schools.
• Prestige Schools: Elite universities contribute minimally to high debt due to low enrollment and generous aid. For-profit colleges and graduate programs drive more extreme debt cases.
—Grok3
Your comments are on target. Generally speaking I, especially, appreciate how you pointed out that colleges need to use restraint when raising their costs on tuition, etc. They have been the major reason why college has become ridiculously expensive and it is due to their never ending spending. They seem to think that building bigger, better and fancier always makes for a higher quality education. It doesn’t, nor does it add to their prestige like they think it does. Colleges and universities need to be held accountable for their part in the reason for student loan debt being so high. For decades they have had a mostly free ride on the backs of students, parents and taxpayers just to name a few of those being taken advantage of.