While not the only cause, the burst of the housing bubble was a serious contributor to the Great Recession. Since we’ve recovered and are once again growing, I’ve heard many people speculating about the cause and timing of the next major economic crisis. The answer may lie in our disaster of a higher educational system.
Student loan debt in the U.S. is currently estimated at over $1.28 trillion. That’s an average of about $29,000 per borrower for bachelor degrees and around $57,000 for graduate degrees. Graduates are leaving college facing loan payments that cost as much as the mortgage on a home. This is keeping them from making purchases that would drive our economy.
The problem is that we are running our educational system like a business. Students are looked at as a source of revenue instead of a resource that should be nurtured and invested in for our future. Capitalism has destroyed our educational system. It has led to poor performance, massive debt, and income inequality that is destroying our middle class.
Our government has decided that it places value on big banks over that of its people and its educational system. The government loans money to big banks at interest rates below 1% while students pay around 4-7%. Those rates are even increasing. A few people in government are working to improve the situation. Senator Elizabeth Warren has been working to pass legislation that will allow students to refinance their debt at lower rates. She understands that our country must invest in education for us to succeed.
While I support Senator Warren and her efforts, there needs to be a change in our way of thinking in order to fix the problem. One way to fix this would be to open a university that would provide free education (at least up to a bachelor’s degree) for all citizens. Yes…it is socialized education (conservatives have to stop being afraid of that word). Yes…it will cost taxpayers. A more educated population would benefit the entire country and more than offset the costs. This type of competition would force private universities to improve quality and reduce costs.
Small changes are great…and I understand that we must do what’s possible right now. However, our next massive crisis is that we are failing in education because we are treating students like customers instead of an investment. Without a massive change, we will see this crisis become another major crash for our country.