Higher Education Debt: Is It Truly Good Debt?

-- By CharlesRoper - 17 Feb 2016

Section I: The Problem

From the very beginning of life for Millennials they have been set on one track, the pursuit of higher education. Always being told and never allowed to question, that higher education is an investment in their future and is good debt. The premise behind good debt is that it is an investment and although you may owe money, at the end of the day it is really putting money back in your pocket, usually through higher returns.

Subsection A: Undergraduate Debt

The first step of higher education Millenials are herded into is that of undergraduate university. While attending university the typical student incurs a debt of nearly 30,000 dollars. See Allie Bidwell, Average Student Loan Debt Approaches $30,000, U.S. News and World Report, (Nov. 13, 2014, at 12:01 a.m.), http://www.usnews.com/news/articles/2014/11/13/average-student-loan-debt-hits-30-000. Upon graduation, after the institutions have their money, Millennials soon realize that the job they think or more likely are told they want in order to truly be successful in life requires much more than the typical bachelors degree.

Subsection B: Graduate Debt

So Millennials are forced to continue down the only path they have known since birth and seek out even higher education though graduate schools. With one quarter facing “good” debt over 100,000 dollars and one out of ten incurring over 150,000 dollars; all in addition to their undergraduate loans. See Allie Bidwell, How Much Loan Debt is From Grad Students? More Than You Think, U.S. News and World Report, (March 25, 2014, at 11:38 a.m.), http://www.usnews.com/news/articles/2014/03/25/how-much-outstanding-loan-debt-is-from-grad-students-more-than-you-think. The meaninglessly high debt incursion is extremely prevalent for Millennials seeking law and medical degrees.

Section II: The Ramifications

Even with the nauseating loan amounts many are quick to rise to defend the concept of higher education being “good” debt. However, there are clear ramifications to incurring this “good” debt, which reveal how devastating it really can be.

Subsection A: Pigeonholed

With the large debt looming over recent graduates, many are desperate to find any job that will provide them with the ability to make the monthly payments. Upon successfully finding a job many soon realize that their debt ball and chains them to the job, through the ever looming monthly payments.

Subsub 1: Kills Creativity

The pigeonholing phenomenon that the “good” debt of higher education causes reaps in the death of creativity. While it may easily be argued creativity was dealt a crippling blow years before the Millennials’ debt actualized, the monthly loan payments dealt a final blow to the straw man that was left. Instead of dreaming of what more is to come, Millennials now crave the safe certainty their jobs provide all because of the “good” debt they had graciously accepted just years before.

Subsection B: No Mortgages

Since graduates are crippled with student loans; even if they are able to secure a job, a large percentage of their income goes directly to the monthly loan payments. The loan payments on top of rent and other living expenses and necessities prevent recent graduates the ability to form any type of savings. With out a savings the Millennials have no opportunities to secure a mortgage, an actual good debt, and are forced to continue to throw away their income on rent and loan payments.

Subsub 1: Can Only Rent: Economic Strain

The lack of savings kills the economy. Instead of being able to use the potential increase in salary from the “good” debt of student loans to further invest in the economy, either through mortgages and home improvements or savvy stock market investments, the majority is forced to use any gain in paying off the student debt.

My page: http://moglen.law.columbia.edu/twiki/bin/view/Main/CharlesRoper

You are entitled to restrict access to your paper if you want to. But we all derive immense benefit from reading one another's work, and I hope you won't feel the need unless the subject matter is personal and its disclosure would be harmful or undesirable. To restrict access to your paper simply delete the "#" character on the next two lines:

• #Set ALLOWTOPICVIEW = TWikiAdminGroup, CharlesRoper
• #Set DENYTOPICVIEW = TWikiGuest

Note: TWiki has strict formatting rules for preference declarations. Make sure you preserve the three spaces, asterisk, and extra space at the beginning of these lines. If you wish to give access to any other users simply add them to the comma separated ALLOWTOPICVIEW list.