by Paul Moomjean

Anyone else feel like we are leaving 2019 and heading into 2022? After dealing with pandemic problems and election rioters, the next big implosion with residual effects is the student loan situation. As Americans are starting to get back on their feet, they might be rocked by additional student loan payments, eventual paycheck garnishments and, therefore, financial ruin. With February being the month when President Joe Biden requires people to resume making payments, if there isn’t some current and future restructuring, we could see a collapse unlike any other. 

This student loan crisis is no joke. To the baby boomer who went to college on pennies on the dollar, it’s hard for them to comprehend the magnitude of the situation. A college education was the bill of goods sold to Gen X, millennials and Gen Z. And it came with a catch: You might have to go back and get a credential, a master’s, or a PhD. There was a time in the 1950s and 1960s when a college degree was a luxury, reserved for teachers, lawyers and doctors. Today, the average entry level job requires tens of thousands of dollars in debt. And for degrees that are worthless. Liberal arts degrees in specific sociological areas like gender studies, recreational behaviors and communications provide students with a very limited set of useful skills, yet a laborious amount of debt. 

U.S. News reports, “The average student loan debt for recent college graduates is nearly $30,000, according to U.S News data . . . College graduates from the class of 2020 who took out student loans borrowed $29,927 on average.” Most outlets report 70 percent of students borrowed for their bachelor’s degree.

So how did we get to the place where useless expensive degrees are now the norm? 

For one, the Department of Education allows federal student loans to go up to $30,000, while private loans can double that. And additional degrees are counted as separate loans. With semesters costing more than that, more and more loan programs have been created, forcing people to consolidate their numerous loans once payments are due, as interest rates rise. Students went back to school so they wouldn’t have to pay back loans, creating more piles of debt. With so much money on the table to grab through both federal and private loans, colleges continue to raise tuition, knowing that 18-year-old kids and their parents will take out the amount of a fancy car or small house, in hopes of buying a better future. 

One quick fix Biden could make in this area is put limits on tuition at state schools that receive federal funding. You can’t have taxpayers pouring in dollars and then take more from them to get in. That’s a lot of double dipping. According to the website for California State University, Northridge, “The CSU’s operating budget has two main funding sources: the state General ​​Fund and student tuition and fees. State funding now covers slightly more than half of the CSU’s operating costs, with tuition and fees making up for the remainder.”

Yet leadership salaries are on the rise. The Times of San Diego reports, “[Cal State] Chancellor Joseph I. Castro was hired in September 2020, in the middle of the pandemic economic downturn, and his starting salary is $625,000, a 30% increase over his predecessor’s salary.” 

Biden needs to work with governors to set limits on salaries and leadership roles, as well as infrastructure, as most students don’t even use these facilities for more than two to four years. With a stronger emphasis on online education, students won’t need million-dollar dorm rooms and student centers; professors can work from home and be hired all over the world at more negotiable salaries.

Biden ran on a ticket promising student loan relief, yet he has failed. This bait and switch will be his “Read my lips…” moment, and with people owing back to their government, they will lose their ability to save, to buy a new home, and invest and become entrepreneurs. An entire generation is becoming too discouraged to be productive, and a woke culture might make them feel better, but it won’t pay the bills. 

For 2022 and beyond to work, Biden will need to cap what state colleges can accept in student loans, cap the amount of payback rates at $200 a month, and cap the amount people can take out. Our economic future depends on it.