The student loan crisis

This video is a good summary of the larger problem of higher education behind the student loan debt problem.  Nowadays young people believe that the only way to be able to earn a decent living is to have the credential of a college degree.  Employers use the college degree as a way to sort job applicants, even when you don’t really need to have taken college courses in order to qualify for the job.  But increasing the number of college graduates doesn’t, in and of itself, increase the number of jobs.  Instead it raises the hurdle to qualify for a good job.

The Foundation for Economic Education, which produced this video, is a right-wing libertarian organization which thinks government programs do more harm than good.  I don’t think that’s always true, but in this case I have to agree.  The Foundation is right to say that it was irresponsible in encouraging young people to take on debt regardless of their potential ability to repay.  It also is right to say that putting more cash in the hands of students does no good if that cash is absorbed by increased tuition.

Click on The Freeman | Ideas on Liberty for more from the Foundation for Economic Education.

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3 Responses to “The student loan crisis”

  1. Chuck Grimmett Says:


    Thanks for sharing this. This is a serious issue that needs more airtime.


    Chuck Grimmett
    Director of Web Media
    Foundation for Economic Education


  2. Atticus Finch Says:

    Phil! I feel like we are starting to agree more and more! I do think that education should be available and is the “great equalizer”, but I think the theory that everyone wants or needs a college education is flawed. I think trade schools and on the job training is greatly unappreciated.

    I just got back from Tokyo where EVERYONE has a college education. The problem is you see highly educated people sweeping the streets (literally) or working as customer service reps for airport parking.

    A Japanese women I met was interviewing at the airport. She spoke 5 languages and had a masters degree, but was terribly worried about not getting the job b/c it is so competitive.

    At a certain point even all the education in the world does no one any good economically. Although I will say the amount of education shines when it comes to the other benefits of education such as low crime and good conversation which were highlights of Japan.


    • philebersole Says:

      Atticus, I agree with you that college education is not for everyone.
      There are other ways to learn besides classroom instruction.

      I remember some years back my nephew was in his early 20s, living at home and, at the urging of my brother and sister-in-law, was trying to get through some community college courses he had no interest in. Then he enlisted in the Navy, and took on what seemed like a decade-worth of self-confidence and maturity in just 12 months. There was nothing wrong with my nephew’s intelligence. He was just the kind of person who learned things hands-on.

      The problem is that young people today think they need a college degree in order to have an economic future, and, for many of them, the goal is to acquire a degree rather than to acquire an education.

      We Americans as a society put too much emphasis on credentialism. I wish there were more high school guidance counselors who respected the skilled trades, and fewer employers who automatically rejected applicants who didn’t have a (sometimes irrelevant diploma.

      Of course there are many occupations—engineering, computer science, medicine—in which you need a solid academic foundation. And even many blue collar occupations, you need to understand calculus, statistics and and lots of other things nobody needed to both with when I was young.

      If we could restore the kind of high-wage, full-employment economy that existed when I was young, in which anybody who was willing to work could get a job, a lot of these problems would dissolve. (This is typical old-guy talk: how things are different from what they used to be.)


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