{"id":2470482,"date":"2025-09-03T02:30:00","date_gmt":"2025-09-03T06:30:00","guid":{"rendered":"https:\/\/monetizemail.com\/magatoon\/?p=2470482"},"modified":"2025-09-03T06:53:09","modified_gmt":"2025-09-03T10:53:09","slug":"ivory-tower-debt-trap-student-loans-distort-the-american-dream","status":"publish","type":"post","link":"https:\/\/monetizemail.com\/magatoon\/2025\/09\/03\/ivory-tower-debt-trap-student-loans-distort-the-american-dream\/","title":{"rendered":"Ivory Tower Debt Trap: Student Loans Distort the American Dream"},"content":{"rendered":"

In a TikTok video that went viral this week (newsworthy, I know), a barefaced young woman sits in her car<\/a>, in the middle of what we Gen Zers call \u201ca crash out.\u201d<\/p>\n

Alyssa Jeacoma, you see, has been making student loan payments of $1500\/month (the cost of a one-bedroom apartment or the mortgage on a starter house<\/a>) for two years.<\/p>\n

In tears and disbelief, she explains that she spent two years thinking she was paying down her debt, and was shocked when she discovered that, thanks to a 17-percent interest rate, her total balance had gone up<\/em>.<\/p>\n

The comments section is full of commiseration: \u201cYep. Used $31k in student loans. I graduated 10 years ago and I now owe $59k\u2026\u201d<\/p>\n

The video went viral, with millions of views, and for good reason. It hits a nerve for many young Americans who \u2014 15 years after Obama\u2019s drastic federal<\/a> takeover of the student loan program \u2014 are drowning in debt, unable to sustain the upward trajectory of living that they were told was the American dream.<\/p>\n

If a young person with no credit history and no collateral assets tried to take out a $50,000 loan to start a business, few if any banks would take the risk. Ms. Jeacoma, who now owes $90,000, seems to agree that\u2019s questionable: \u201cHow does this even make sense? I signed up for this\u2026when I was 17. This should not be legal, bro.\u201d A college education was once thought such a safe investment that no one blinked at the idea of giving tens of thousands of dollars to a teenager with only the barest understanding of the contract she was signing.<\/p>\n

This woman\u2019s student debt has an interest rate close to that of a credit card (the great no-no of financial advice \u2013 whatever you do, don\u2019t take on credit card debt, or you may never climb back out of the abyss again). We\u2019re giving away crushing student loans like candy. The entire university system is riding on the shoulders of broke twenty-somethings, mortgaging their futures to pay for football stadiums and presidential salaries, asking them to be small Atlases holding up a whole world while they slowly suffocate under the weight.<\/p>\n

Pundits decry<\/a> that Millennials and Gen Z \u201cstuck<\/a> in their parents\u2019 basements<\/a>.\u201d Headlines lament that we aren\u2019t growing up<\/a> fast enough<\/a>, aren\u2019t buying<\/a> houses<\/a> fast enough<\/a>, aren\u2019t getting out of deb<\/a>t fast enough. The average age of buying a first house in America is now 38<\/a>, the highest on record. And no wonder, when so many are still trying to pay down their student loans.<\/p>\n

But, the argument goes, you have to go to college to be successful in life. If you don\u2019t go to college you\u2019ll end up working at Burger King and living at your parents\u2019 house and never making it on your own.<\/p>\n

Unfortunately, if that was once true, the data show it isn\u2019t anymore. Yes, young people are<\/em> working at Burger King and Starbucks, living at their parents\u2019 houses, and failing to strike out on their own. But a lot of them also<\/em> have college degrees, and those college degrees aren\u2019t saving them. Pundits and guidance counselors alike are selling college degrees as a life raft in the rising waters of an unhappy economy. But said college degrees are proving to be oxygen masks that don\u2019t work, life rafts that fail to expand when they hit the water. Even students with the coveted sheepskins are discovering, too late, that parchment doesn\u2019t float.<\/p>\n

52 percent of college graduates<\/a> are underemployed a year after graduating (52 percent of the class of 2023<\/a> were working jobs that didn\u2019t require degrees at all). At the ten-year mark, 45 percent are still underemployed. The New York Fed estimates that 33 percent<\/a> of all college graduates are underemployed \u2013 of all ages, in the entire economy.<\/p>\n

As Cassandra<\/a> (and entrepreneurs like Isaac Morehouse<\/a>, writers like Ryan Craig<\/a>, political players like Robert Reich<\/a>, and countless others) have been saying for well over a decade, college does not make you employable.<\/p>\n

College doesn\u2019t even guarantee you an education. The great redeeming value of college has always been its educational value. Even if you aren\u2019t going to use the degree in a specific field, a liberal arts degree will still help make you a well-rounded person.<\/p>\n

But again, the statistics say otherwise.<\/p>\n

Only 46 percent of American adults can read above a sixth-grade level, but 47 percent of American adults<\/a> have at least an associate\u2019s degree (another 15 percent attended college but didn\u2019t graduate). That means more adults have college degrees than are literate at a high-school level. We send young people to college who shouldn\u2019t have graduated high school, and even after they\u2019ve graduated college<\/em> they still have an elementary-level literacy capability. How does that even happen?<\/p>\n

And if all these statistics are true, then why on earth are we consigning kids to a debt rat race?<\/p>\n

The cultural fear runs deep: if you can\u2019t get a job that requires a college degree, you\u2019re not going to make it in life (fundamentally not true). A blue-collar job<\/a> can pay well into the six figures. Even a moderate hourly rate (say $20\/hr) can be enough to establish a foundation in life. A young person living at home<\/a> and saving for the first couple years of their career can have an enormous advantage over their college-educated peers.<\/p>\n

What\u2019s actually shackling young people is the debt, an anchor around their neck they can\u2019t untie fast enough, while sinking at an alarming rate (to the tune of 17 percent a year interest rates). It\u2019s almost impossible to tread water fast enough to keep above the surface.\u00a0<\/p>\n

And debt for what? Not for the benefit of the students, clearly, if some are graduating still unable to even read at a high school level.<\/p>\n

Of course, some make it inside the system and thrive. According to the stats, most don\u2019t<\/a>. Fewer than half who start finish in four years. Every industry is filled with stories \u2014 doctors who hate their careers but are so shackled<\/a> by crippling med school debt<\/a> they have no choice<\/a> but to carry on.<\/p>\n

The cost-benefit analysis doesn\u2019t check out. But high schoolers aren\u2019t taught how to do a cost-benefit analysis<\/a>, so they don\u2019t know how to analyze the life-altering decision that comes at them often before they\u2019re even legally adults. Most high schools don\u2019t require an economics class as a prerequisite for graduation. Classrooms don\u2019t cover personal finance \u2013 just interpreting Shakespeare and prepping for the SAT and putting a condom on a banana<\/a>. Everyone is taught how to get good grades, how to ace a test, and how to impress a college admissions officer.<\/p>\n

Which they do, to a tune of 62.8 percent<\/a> (the number of 18-24 year olds enrolled in college in October of 2024). High schools are really, really good at producing students that can get into college.<\/p>\n

But they\u2019re really bad at preparing kids to make financial decisions that won\u2019t weigh them down for decades to come. Students sign up for loans (the average graduate owes $33,150) with a 17-percent interest rate without knowing what that means, then are shocked when they see their balances rising.<\/p>\n

The solution isn\u2019t free college \u2014 because clearly college isn\u2019t solving anyone\u2019s employment problems.<\/p>\n

The solution is to stop the cycle. Do a cost-benefit analysis on what you\u2019re buying before you make the purchase. Assess: is the career path I\u2019m on really going to work for me? Or is the liberal-arts-to-Starbucks-pipeline<\/a> not the well-worn highway I want to traverse?<\/p>\n

Teaching kids how to run cost-benefit analyses and understand finance might cripple our opulent, bloated, debt-fueled higher education system. It depends on our young people\u2019s na\u00efvet\u00e9 to pad its budgets and the pockets of its administrators. But it might just save the next generation of young people, who are far more important.<\/p>\n

The post Ivory Tower Debt Trap: Student Loans Distort the American Dream<\/a> was first published by the American Institute for Economic Research (AIER)<\/a>, and is republished here with permission. Please support their efforts.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In a TikTok video that went viral this week (newsworthy, I know), a barefaced young woman sits in her car, in the middle of what we Gen Zers call \u201ca crash out.\u201d Alyssa Jeacoma, you see, has been making student loan payments of $1500\/month (the cost of a one-bedroom apartment or the mortgage on a …<\/p>\n","protected":false},"author":662,"featured_media":2324418,"comment_status":"close","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[59],"tags":[],"class_list":["post-2470482","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2470482","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/users\/662"}],"replies":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/comments?post=2470482"}],"version-history":[{"count":1,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2470482\/revisions"}],"predecessor-version":[{"id":2470483,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/posts\/2470482\/revisions\/2470483"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media\/2324418"}],"wp:attachment":[{"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/media?parent=2470482"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/categories?post=2470482"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/monetizemail.com\/magatoon\/wp-json\/wp\/v2\/tags?post=2470482"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}