While much attention is focused (rightly) on the mortgage fiasco, who’s responsible and what, if anything, should be done by our government (how about nothing?), there is a parallel debt crisis looming on the horizon: college loans.
Much like the actions of Democrat leaders to pressure banks into making credit available to those who could not afford it, our brilliant government leaders have also worked hard in recent years, hand-in-hand with banks, to make credit available to18 year olds so that they may go to college. Being from a generation that understood that one worked his way through college, it still comes as a shock to me that people well in to their 30s are still paying down college loans, often for degrees that have no elevance to their chosen careers.
While I might disagree with going into debt up to my ears before entering the workforce, I certainly don't begrudge those who might do this. What bothers me is that our own government encourages this with tempting advertising, government-promoted loans and nebulous guarantees of no obligation for payback until years later. As anyone with young adult children knows, most 18-year old kids have a hard time relating to anything that is going to happen more than a few days ahead.
Our own state is a master of pushing debt onto unsuspecting young adults and their parents. You've probably seen the road signs and heard the advertising for the "College Fund of North Carolina," or CFNC.org. This harmless-sounding organization is a coalition of our state's colleges, banks, and the state's General Assembly. They are little better though than a drug pusher, preying on naive families who want their children to study beyond high school.
My wife and I were provided with an interesting glimpse into how the CFNC works back in 2001, when our oldest child entered the UNC system. Her name was a common one in The Netherlands, a result of our 10-year life in Europe. However this name was identified by UNC computers as one used by many African-American families these days, much to our surprise. We were soon inundated with offers of low-interest loans from a number of organizations, in particular the CFNC. She was even offered the services of a free tutor during her first semester, in order to help her "adjust to a diverse community" that she would be experiencing on campus. Your tax dollars at work…
For the same political reasons (vote buying) that people with poor credit have been able to obtain a mortgage, so too are many families taking on heavy college debt loads with little promise of being able to pay this off in a reasonable amount of time. If all this were taking place in the private sector, it would be a non-issue. But it is not. CFNC is funded by the NC General Assembly. That is not to imply that taxpayers are liable for defaulted loans, but it does beg the question why our state government is getting involved in such an activity to begin with. If there was real demand for loans from people with good credit ratings, wouldn't the private sector be able to supply this without any government involvement?
We all know that tremendous pressure exists to expand the UNC system and this holds true for private colleges. There is today a huge industry that feeds off this growth, resulting in lower standards (e.g. once-proud Wake Forest University dropping SAT scores for admission), all sorts of fantasy degrees of little real value, and pressure on faculties to keep classrooms full. Which reminds me of a recent story told to me by a friend who is a senior member of the NCSU Engineering faculty, I will call him Dr. T:
Kent: "How are things going this semester?"
Dr. T.: "Terrible. I flunked 75% of my class last semester."
Kent: "Why? That seems rather high."
Dr. T: "I know. They were 3rd-year engineering student. They were dumb and lazy so I failed them."
Kent: "But that's what you are supposed to do, isn't it?"
Dr. T: "Yes, but the department head was mad at me."
Kent: "Why?"
Dr. T: "He called me into his office to tell me that he was getting calls from irate parents who complained that Johnny had never before flunked a class, was in his third year, and they were paying tuition for his education. My boss said I couldn't do this anymore."
Kent: "So, what did you say to him?"
Dr. T: "I was so disgusted. I sarcastically told him that he should have said the parents were paying tuition. I would have passed them. He was rather upset by that."
Kent: "I now understand why you are depressed."
And that was in one of the best engineering departments in the southeastern United States. Engineers still stand a very good chance of getting a high-paying job, resulting in an income that will permit the payoff of college loans, and generation of the additional tax revenue to replace the $100,000 cost taxpayers now bear in NC for every 4-year student. How do things look though for a freshly-baked holder of a diploma in African studies, liberal studies, communications, women studies, psychology orany number of other degrees or which there are few, if any good-paying jobs?
Seeing how politicians have manipulated mortgage markets for political gain, I predict that the same melt down is bound to happen in the college loan market, and that those same people who are responsible for it will demand from the rest of us to bail others out. After all, it will be for the children.
Editor's Notes:
Kent Misegades is president of AeroSouth in Cary.
Your blogger's husband, Rob, has both a B.S. and M.S. in Electrical Engineering (with math minors) from North Carolina State University. He says that students were better prepared when he was a student in the mid - to - late 1980s.
Your blogger graduated from Meredith College with a liberal arts degree (Political Science/Communications/American History). To get her "good paying job", she had to move into the technical arena, where she worked as a tech. writer and web designer. Her classmates who chose to major in areas like women's studies, mostly hang out at coffeehouses and liberal protests, today.
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