America is a nation mired in debt.  The federal government is so far in debt we may never see a balanced budget again.  Most of the 50 states are so debt-ridden they have to borrow money to pay their on-going obligations such as state retirements.  Finally, individual Americans are drowning in debt.  Most Americans owe on their cars, owe on their houses, and owe on their credit cards.  In fact, the average credit card debt for American citizens is now $15, 159 and growing.   But credit card debt is nothing when compared to student loan debt.  The average student loan debt is now $35,200 and growing.  But student loan debts exceeding $100,000 are not uncommon.  To make matters worse, most students who graduate owing on a large student loan also carry a heavy burden of credit card debt on top of it.  Things have gotten so out of hand with student loans that I predict the next major crack in our economy will come from college students defaulting on their government guaranteed student loans.

According to World’s November 2, 2013 edition, “Student loan debt now outstrips car loan debt and even outstanding U.S. credit card spending—growing from 12 percent in 2004 to 35 percent in 2013 of all non-housing debt.  Worse, as the cost of college tuition and the cost of borrowing to pay for it have skyrocketed, income levels and employment levels have flat-lined.  It’s perhaps then no surprise that nearly 40 percent of federal student loans are delinquent—as it becomes a longer and steeper climb for most college graduates to pay off bigger and bigger loans…Total federal student loan debt has increased by 95 percent in just six years, from $516 BILLION in 2007 to 1.007 TRILLION dollars in 2013.  Average costs for tuition, room, board at U.S. institutions have increased by 12 percent since 2007, after adjusting for inflation.”

At this writing, 40 percent of the 38.7 million students who carry student loan debt are behind in repaying their debt.  By this I mean that they are in deferment, forbearance, or down right default.  One could be forgiven for thinking that with a failure rate this high, someone in the federal government would want to apply the brakes, but this is hardly the case.  Democrats and Republicans alike—not all but most—treat the federal student loan program like a sacred cow.  In fact, to question a student’s “right” to a federal student loan is akin to questioning mom and apple pie.  But even a cursory look at federal student loans as a concept raises some disturbing questions, questions that taxpayers and members of Congress should be asking.  Consider just a few of these questions.

Does it make sense to loan thousands of dollars to students who have chosen college majors that almost guarantee they will be unable to repay the debt? Many college degrees have little or no market potential, yet the federal government is just as happy to make a loan to a philosophy major as to a STEM major.  Now, before my liberal arts friends get offended let me say that I understand the intrinsic value of a liberal arts education.  Further, I believe students should be able to major in the field of their choice—just not on my dime.  Why should my taxes go to support a student who knowingly chooses a college major that has no market potential?  Let that student find a way to pay for his own education—something unique like working his way through college.  Why loan thousands of dollars to college students who will wind up working at Wal-Mart, if they can find jobs at all?

Another question to consider is this: What impact do student loans have on the cost of a college education?  The answer to this question is simple.  Colleges and universities continue to increase the cost of tuition, room, and board for the oldest reason known to man: because they can.  The reason they can is federal student loans and other types of federal financial aid.  As long as students can borrow from a bottomless well of federal dollars there will be no limits on how high college tuition can go.  If federal financial aid were not the dominant player it is in college and university decision making, tuition costs would be half of what they are now.

Another question to consider is this:  What effect are federal student loans having on the character of college students?  It is my contention that federal student loans encourage a live-big-now-and-worry-about-the-consequences-later mentality among college students.  How did I form this opinion?  By talking with college students one-on-one every single day of my 36 year career in higher education.  Colleges and universities nationwide are full of young people who are borrowing huge sums of money with no greater goal in mind than to spend four years partying and avoiding responsibility.

These students are in college for the so-called college experience, not to prepare themselves to be self-supporting, contributing citizens.  Because of this, they choose the college degree of least resistance, and colleges oblige by continuing to offer degrees that are no more challenging than a walk in the park.  In fact, having these “easy” degrees available is a necessary part of the typical college’s grand strategy.  Without easy degrees available, a substantial portion of today’s student body would flunk out.  Then where would our colleges be?

The problem with this approach is that it eventually catches up with students and their colleges. It creates a glut of college students with know-nothing, do-nothing degrees who are only marginally employable, and in minimum-wage positions at that.  As more and more college graduates with degrees in suspect fields (e.g. Leisure Management, Women’s Studies, Queer Studies, etc.) are unable to find jobs except at Wal-Mart or McDonald’s, the credibility of all college degrees are called into question.  There is a day of reckoning coming for college students as well as for colleges and universities and the match that is going to light the fuse will be federal student loans.