Today, President Obama is yet again proposing another relief
measure for the thousands of students mired in student loan debt, which now
exceeds $1.2 trillion. The stats go
something like this: about 70% of the
seniors who graduated in 2012 had student loan debt, on average $29,400. According to Project on Student Debt the rate
of debt increased a yearly average of six percent from 2008 to 2012. Kansas students fared a bit better. In 2012 the average student loan debt was
$23,677, according to that same source, with 59% of undergraduates reporting
debt. My alma mater, the University of
Kansas, had half of its undergraduate student body reporting debt, and that was
on the low side for the state. Only
Pittsburg State was lower; it was in the mid-30’s. Two Kansas private non-profits exceeded 80%
of their students being in debt.
That could have been me had it not been for Mike
Schwartz. Mike Schwartz was the
president of Citizens State Bank in Paola when in 1964 I asked for a National
Defense Education Act (NDEA) loan. That
program came about as a direct result of the Sputnik scare in the late 1950’s. The Russians were first in space, which meant
we were behind, which meant our schools must not be doing the job, so we had to
put more money into education, especially science and foreign language—or the
Commies would take over America. I didn’t
want the Commies to take over America, and I wanted to go to college, so Dad
and I walked down to Citizens Bank to take out an NDEA loan to help pay tuition. Mr. Schwartz refused me the loan.
He refused! Given who
was getting the loans through other banks, I had just assumed they were ours
for the taking. I’m sure the shock and
embarrassment registered on my face.
“I could give you a loan,” he said, “but I’m not going
to. You won’t understand now, I know,
but I’m doing you a huge favor,” he continued.
Looking at my dad, he added: “These
are a bad idea.” Instead, he pulled out
a tablet and helped us draw out a budget not only for my college but for my
brother’s. Together, the two of us have
five degrees with no loans and no debt.
Of all the wonderful advice and gifts I have received over
the years, I hold that one by the banker, whom many called “Scrooge” behind his
back for his conservative business practices, to be one of the most valuable I’ve
received. Mike, NOW I understand.
But I wonder if the general public really does comprehend the danger that this debt in excess of one trillion dollars presents--not only to individuals holding the debt but to our very culture. How many grad students stay grad students because the fear of having to pay off the debt is greater than the prospects of yet more study? How many people have to by-pass their public service instincts because a debt looms? How many houses go un-purchased because would-be buyers have poor credit ratings due to student debt? How many jobs go un-offered now that credit checks have become part of employment review? How many people develop a reliance on purchasing on credit because they already are mired in student debt?
Some cassandras have warned that the student loan debt debacle is a bubble ready to make the mortgage bubble look like a burp. I hope not....
But I wonder if the general public really does comprehend the danger that this debt in excess of one trillion dollars presents--not only to individuals holding the debt but to our very culture. How many grad students stay grad students because the fear of having to pay off the debt is greater than the prospects of yet more study? How many people have to by-pass their public service instincts because a debt looms? How many houses go un-purchased because would-be buyers have poor credit ratings due to student debt? How many jobs go un-offered now that credit checks have become part of employment review? How many people develop a reliance on purchasing on credit because they already are mired in student debt?
Some cassandras have warned that the student loan debt debacle is a bubble ready to make the mortgage bubble look like a burp. I hope not....
