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On August 28th, President Obama told a group of college students in Iowa that Mitt Romney considers young Americans a “lost generation.” It was a classic case of projection. A Pew Research Center report released in February–in other words, during our ostensible recovery–reveals the grim reality of the current administration’s economic policies: only 54.3 percent of Americans between the ages of 18 and 24 have a job. That represents the lowest rate of youth employment since the government started keeping records in 1948.
It is telling that the president would make that statement at a college campus. Perhaps nothing has debilitated millions of younger Americans more than the cost of a higher education. College tuition has skyrocketed, increasing more than sixfold since 1981. Moreover, the student loan debt bubble, most of it backed by taxpayer guarantees, has soared to over $1 trillion. Taxpayers are on the hook for about $870 billion because part of the Affordable Healthcare Act passed in 2010, aka, Student Aid and Fiscal Responsibility Act, made the federal government the sole originator of student loans. Unsurprisingly, government-owned loans have spiked since 2009.
Taxpayer guarantees have produced other unsurprising results as well. Colleges have come to resemble luxury resorts more than institutions of higher learning. Lavish recreational centers were built, dorms were radically upgraded, and administration staffs became top-heavy with unnecessary paper-pushers and diversity specialists. Salaries were substantially increased for professors, even as workloads remain far less than comparably-paid people in other fields. Ironically, the consulting firm Bain & Company identified $112 million in annual savings just within the business operations at the University of California, Berkeley in 2009.
Such unjustified largesse has equally predictable consequences. Student loan debt has also skyrocketed, with each student borrower under the age of 30 owing a record-setting average of $20,835, according to data released in July by the Federal Reserve Bank of New York. Couple this reality with a Rutgers study showing the average starting salary for a college student has gone down 10 percent to $27,000 per year and the result is stark: FinAid loan calculator reveals it would take 11 years at that salary to pay off one’s loans.
Yet even if paying off one’s loans is burdensome, it has been commonly assumed for several years that a college diploma was worth it. Sadly, that has become an erroneous assumption. Data examined by the Associated Press last April revealed that college graduates have fared even worse than younger Americans overall. 53.6 percent of bachelor’s degree-holders under the age of 25 in 2011 were either jobless or underemployed, representing the highest total since 2000. And many of these college graduates are employed in jobs that require a high school diploma or less. Young graduates employed as waiters, waitresses, bartenders and food-service helpers outnumber those employed as engineers, physicists, chemists and mathematicians combined, while cashiers, retail clerks and customer representatives substantially outnumber engineers.
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