How do you know the college bubble has gotten too big? When there are more janitors with college degrees than NASA employees.
“Thirty-percent of the adult population has college degrees,” he notes. “The Department of Labor tells us that only 20% or so of jobs require college degrees. We have 115,520 janitors in the United States with bachelor’s degrees or more. Why are we encouraging more kids to go to college?”
Mr. Vedder sees similarities between the government’s higher education and housing policies, which created a bubble and precipitated the last financial crisis. “In housing, we had artificially low interest rates. The government encouraged people with low qualifications to buy a house. Today, we have low interest rates on student loans. The government is encouraging kids to go to school who are unqualified just as it encouraged people to buy a home who are unqualified.”
The higher-ed bubble, he says, is “already in the process of bursting,” which is reflected by all of the “unemployed or underemployed college graduates with big debts.” The average student loan debt is $26,000, but many graduates, especially those with professional degrees, have six-figure balances.
Mr. Obama wants to help more students discharge their debts by capping their monthly payments at 10% of their discretionary income and forgiving their outstanding balances after 20 years. Grads who take jobs in government or at nonprofits already can discharge their debt after a decade.
“Somehow working for the private sector is bad and working for the public sector is good? I don’t see on what basis one would make that conclusion,” Mr. Veder says. “If I had to make some judgment, I would do just the opposite.”
The community organizers of tomorrow have to come from somewhere. And the dwindling number of people who pay their own way while working for a living have to foot the bill.
A final thought from a man whose work Obama is clearly familiar with.
“One of the greatest benefits of the revolution is that even our prostitutes are college graduates.” – Castro to director Oliver Stone in 2003