I am a university debt slave. This modern slavery differs in one important aspect in my opinion. I chose to don my metaphorical chains. I, like many others, bought into the idea that a university degree was an investment. There is no doubt that, for some, this is true. A university degree symbolising one’s supposed understanding of a particular subject can surely lead to a worthwhile career. However, for many, it leads to debt slavery.
Let it be known that the cost of a university degree in the United States in no way reflects the inherent value of the education (or lack thereof) one receives. The cost of a university degree is a bubble and like all bubbles, it cannot last. Sooner or later, many young people will determine it is not in their best interest to saddle themselves with $10,000, $50,000, $100,000+ in debt so early on in life.
An investment, although never risk free, is supposed to achieve some sort of return. Sadly, for many young people, the return is to living in their parents homes while they search for a job that will likely be disappointing and unrelated to their majors. Even the New York Times has taken a break from its usual ignorance and general evilness to notice that a college degree is not all sunshine and rainbows.
Peter Schiff nailed the problem in a video from a while back (from about 2:50 onwards). His premise is familiar to anti-state types like myself. Simply put, the government (or one of their tentacles, like Sallie Mae) guarantees any amount of student loan debt, which pretty much guarantees universities will charge as much as possible. The reality is, by trying to make college affordable for all, the government has succeeded in driving prices up to levels that make it impossible for many to attend college without going massively into debt (a debt, by the way, which can never be wiped away through bankruptcy, making it unlike any other debt in the world). Like all government programmes (think the housing bubble, where homeownership became a right, in the view of the government), the “education for all” policy has had major unintended consequences. Some have made preposterous claims that without these loans many young people would be unable to go to college. More accurately, if the government got out of the student loan business altogether the cost of tuition would dramatically drop, allowing more people to attend college without going into massive debt. Universities would probably notice if their classrooms were empty and would have to lower costs in response. Oh sure, politicians would demagogue the issue and say that if you are against unlimited student debt (I mean, loans) then you are against students and education. Nothing could be further from the truth. Speaking out against crippling student debt is favourable to students and education.
In the above video link, Mr. Schiff takes a look at the historical cost of tuition for Yale University. He says that in 1810, the cost of tuition was $33 a year. It stayed at that level until the 1940s. No tuition increases for over 30 years! These days, it seems like tuition is substantially raised by the hour! To put that $33 into perspective: the price of gold was $20 an ounce in 1840. A year at Yale was 1.65 times the price of an ounce of gold. As of this writing, gold sits at $1,496 an ounce. A year’s tuition at Yale, at the 1.65 times gold level, would be $2,468. Something tells me when I go look up the price of a year’s tuition at Yale, it will be more than $2,468. Let’s see…
Just as I suspected. The average cost of tuition for 2010-2011 was $38,300 (not including another $11,000 for room and board). Thus, Yale tuition is 25.6 times the price of an ounce of gold! Isn’t inflation fun! And I thought Yale was exclusive in 1840!
Don’t get me wrong, America’s landscape is dotted with great universities where one can truly educate themselves. However, the ever-rising cost of tuition is not what makes America’s universities world-class. In the end, it could prove their undoing. Education need not be expensive, ideas are free as they say.