On Monday the New York Times' published a story about the immense and growing debt burden on college graduates. In 2003, two-thirds of bachelor's degree receipients had college debt, and their average individual debt load was a whopping $24,000.
As the piece, by Tamar Lewin, notes, most economists still consider student debt "good debt" because a college degree raises a worker's lifetime earnings. But what about those young Americans who take out loans to pursue higher education, yet drop out before receiving any kind of degree? Afterall, just 53 percent of students who enter four-year colleges graduate within six years. At two-year community colleges, half of all students drop-out in the first year, and only 25 percent finish their programs within three-years.
Half of all college drop-outs have borrowed some money for tuition. And consider this depressing statistic: One in five students who drop out of college leave only after accumulating $20,000 or more in debt.
These are the folks most unable to pay back their loans; the rhetoric of "college for all" simply does not match the reality of their lives. That's why we need to be providing young teenagers–in middle schools and high schools–with much savvier college and career counseling. Given the state of the economy, we have a responsibility to help young adults protect themselves from the spurious claims of for-profit and low-quality colleges with high drop-out and loan default rates, and we need to explicitly direct people toward cost-effective higher education and job training programs that have clear records of preparing students for remunerative employment.