Higher Education the American Way: Signing-Up for Debt

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While an increasing level of income inequality remains on the minds of Americans still reeling from the economic crises of 2008, the focus on post-secondary education is as strong as it has ever been. In her commentary The Main Perk of Campus? It’s Fun, Donna E. Shalala, president of the private University of Miami, underlines the importance of an on-campus undergraduate experience to the maturation of young Americans. “We’re in the business of helping students mature,” she states as she makes the argument that on-campus life is essential to attributes like self-confidence, individuality, and maturity (Shalala, 2013, p.1). She points out that private universities like the University of Miami have worked hard to convince developers and real-estate management companies to develop dormitories and apartments on or near campus to convince students to remain active within the campus environment. Shalala closes with an emphasis on how much easier and more convenient on-campus life is for college students.

Remarks like that of Shalala echo the trends and behaviors of Americans across the board, trends and behaviors that readily accept the price of debt no matter the consequences. The financial crises of 2008 that sent the world into a recession, the effects of which are still felt today, were a direct result of such a willingness to take on debt for the quick fix of a better house, a better car, or in this case a better education. While much of the blame for the 2008 financial crises has focused on “big banks” and illicit collusion between Wall Street fat cats, the millions of home buyers who took on mortgages with monthly payments 50-100% of their monthly income should take some blame.

The willingness to take on massive amounts of debt for a better education is little better than such a trade-off for a bigger garage or a private bathroom, but the core of the problem persists: Americans know how to spend, but they do not know how to budget. Shalala echoes this when she states that students who live off-campus “miss out on a few opportunities to mature. I think the big two are learning to cook and learning to budget” (Shalala, 2013, p.1). Global financial trends over the past decade should sound the alarm when statements like this are made. Contemporary maturity requires an understanding of, at the very least, basic budgeting.

The need to budget is especially important when one looks at the rising cost of post-secondary education in America. Since 1985, according to Bloomberg News, the cost of higher education has risen 500%, compared with a 286% rise in medical costs and a 121% rise in the consumer price index (Jamrisko & Kolet, 2013). In a country where the wealthiest people are acquiring more wealth and the number of people struggling to meet basic needs is increasing, higher education seems to be the answer for the majority. The same banks that pushed the American economy through the housing crisis, however, are tossing money at that majority. Private banks covered about 57% of all student aid during the 2012-2013 school year (Trends in Student Aid, 2013). So, while the hope for the growing mass of poor Americans rests in a post-secondary diploma, it will likely come in the form of a debt agreement subject to the terms and oversight of private banks that do not have a very trustworthy track record.

The willingness to sign up for such heavy debt loads will likely remain, despite the rising cost of post-secondary education. Representatives from universities, who understand the ease with which young students can obtain education loans, push this agenda. Shalala touched on her belief that an on-campus experience was important to her own maturity, and that she understood such a community is integral to build-up of personal attributes like self-confidence. It’s likely, though, that such self-confidence will take a significant hit when the student graduates and must accept a less than ideal job in a less than ideal situation to pay off a hefty monthly student loan bill. Budgeting should be cultivated at a young age, not forced upon new graduates after a 6-month grace period. It’s unlikely that a focus on financial acuity will happen at private universities like the one Shalala oversees. Echoing beer commercials and sports advertisements, Shalala underlines the problem with American education in her closing remarks that staying on-campus “would be simpler… And it’s also enormous fun.” She forgets to mention how much her students will be paying for that fun, for a very long time.


Jamrisko, M., & Kolet, I. (2013, August 26). College costs surge 500% in U.S. since 1985: Chart of the day. Bloomberg News. Retrieved from http://www.bloomberg.com/news/2013-08-26/college-costs-surge-500-in-u-s-since-1985-chart-of-the-day.html

Shalala, D. E. (2013, August 29). The main perk of campus? It’s fun. New York Times. Retrieved from http://www.nytimes.com/roomfordebate/2013/08/29/should-students-live-on-campus-or-off/living-on-campus-is-fun

Trends in Student Aid 2013. (2013). New York: The College Board.