You just graduated from college. You were taught at an early age to follow your dreams, reach for the stars and find work that makes you happy. You were taught that everything will work out if you believe in yourself.
Yet, for the first time in your life, you have no structure in your daily routine and $25,000 in student debt. You are job-hunting in a downturn and possibly living back home.
Welcome to the quarter-life crisis. If you don’t have a degree, you are immediately excluded from a major swath of the American job market. If you do have a degree, your prospects might be bleak, too.
From your perspective, the American dream is beginning to look like a farce. Forget buying yourself a home. You are faced with the more pressing questions associated with survival, such as paying for food, shelter and thousands of dollars in loans.
Since 2010, student loan obligations, expected to reach $1 trillion this year, have surpassed credit card and auto loan debt. I confronted the faces of “diploma despair” recently when I met with 15 students at San Francisco State University, each with federal student loans and the promise of decades of payments after graduation.
SFSU students carry an average debt of $18,000, and federal student loans cannot be forgiven through bankruptcy. SFSU estimates its default rate for the coming year at more than 5 percent — low compared to the national average of 8.8 percent.
Defaulting ruins credit worthiness — and some employers avoid job candidates with bankruptcy records. Furthermore, bad credit hurts a person’s ability to obtain loans that might be needed to put business ideas into action, not to mention obtaining loans for a car or a house.
These SFSU students did not come from privileged households. They talked of working two or three jobs between classes. One senior said undergraduate loan debt makes it difficult to take on more debt to pursue advanced degrees. Another student said while she had a passion for public service, the type of jobs available typically don’t pay enough to cover student loan payments and other living expenses.
The cruel reality is that federal student loan payments don’t begin until after graduation and usually cover 20 years of payments. That’s why President Barack Obama just finished paying off his student loans eight years ago. The president pursued his dream, and it worked.
But the dreams of most students are quickly disappearing under the projection that the unemployment rate for 2012 college graduates will be 50 percent. Students’ posts to my website question the wisdom of paying for a degree and becoming a debtor when the opportunities to repay loans appear bleak.
We live in a society where the richest 1 percent of the country owns one-third of our wealth, and where the three richest people would have to spend 4.5 percent of their incomes to keep federal loan rates at their present level for all students. A new study shows families pay 35 percent of college costs, so as higher education fees rise, discretionary household income declines.
We are a nation where 187 F-22 fighter planes that cost taxpayers $64 billion sit idle with no military purpose — they were built and never used for aircraft-on-aircraft battles that are no longer the main method of war. The cost of war in Iraq and Afghanistan is close to the staggering sums of student debt. Obviously, we should be investing more in our students and less on war.
But even putting costs aside, there is the issue of designing education that fits our economy and our public welfare needs. Do diplomas need to cost $109,000 — the average paid in fees and tuition for an undergraduate degree at a private, four-year college in 2011?
Can free online courses supplant in-classroom time? Should there be lower-cost colleges that specialize in public-service careers? And how do we protect the benefits of critical thinking and the cultural aspects of intense study after high school?
We need to figure this out now, otherwise we will graduate a generation of thinkers with no place to go who are plagued by despair and hopelessness. The innovation that made our country great needs to be applied to the design of an educational system that is affordable to all income groups.
Jackie Speier is a congresswoman from California whose 12th District covers portions of San Francisco and San Mateo County.