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A generation in hock: Debt and the college degree

PERHAPS the most amazing thing about putting a young person through college in the United States today is that so many families do manage it. As the cost of an education at some institutions begins to rival that of a ``starter home'' in some localities, the financing of those educations is still likely to be a patchwork of savings, loans, summer and holiday jobs, and scrimping.

This wouldn't be so bad if it ended when the youngest in the family got his or her diploma. But it doesn't. Many young people start out their adult lives under a burden of debt.

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A new study of student loans, just released by the Joint Economic Committee of the US Congress, found that the students in private four-year colleges who borrowed for their education had accumulated an average debt of $8,950 at graduation. The figure for borrowers at state schools is $6,685. These figures represent roughly a tripling of those of a decade ago. For students borrowing for graduate and professional education, the debt burden can go easily into five figures.

This debt explosion is the result of rising college costs when family incomes are generally barely holding steady and when the federal government has been shifting from grants to loans to support higher education. As Education Secretary William J. Bennett has noted, the long-term effect of such loans is not to make college more affordable, but to make it easier for colleges to raise their fees. And fees have been going up, even as general inflation has slowed to a creep.

There are several reasons for concern about student indebtedness. It will make young people feel pressure to land career-oriented jobs, even the wrong jobs, right away. The luxury of taking a year or two to travel or try out a new field or even volunteer for the Peace Corps will evaporate. Indebtedness will likely push young people away from careers in ``public-service'' fields such as teaching and into fields where the fixation is on the bottom line. (As a corollary, newspaper columnists will probably complain about a lack of idealism among young people.)

The debt burden may make some graduates feel a need to delay buying homes and starting families, too.

Rising college costs and the attendant need to borrow are not doing anything to help close the economic gaps between black and white - nor between women and men, for that matter. A number of institutions are reporting their black enrollments down in recent years.

Then the rise in student debt comes at a time of concern about the national debt, consumer debt, farm debt, third-world debt, and just about every other kind of debt we can think of. Is buy now, pay later - or get the next generation to pay later - really the philosophy we want to adopt?

It is only fair to note that a student loan is borrowing to invest, rather than borrowing to consume. And no one is suggesting that education is no longer a good idea.

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But the student debt issue deserves major attention and some fresh thinking. The prospects for more outright grants for education are dim. Colleges need to consider what they might do to encourage more frugal life styles among their students, as well as how they can hold the line on their own costs.

Higher education is important enough to be worth family sacrifices, but not an insupportable burden.

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