Sunday, March 21, 2010
Good afternoon. You are being hosed
As if you needed further proof, the following is an example of how the United States government has inflated education costs to create generations of Debt Children.
Harvard graduate and current University of Buffalo professor Michael S. Rozeff cites that his yearly costs for Harvard in 1958 (room and board) were $2020/yr maximum. The median family income was at least $5100/year in 1958 and even higher for those families where the head of household worked full-time throughout the year. Yes, Debt Children - Harvard room and board for a full year was under 40% of the median family income per year.
Compare that with today, where Harvard room and board has breached the $50k/year level, and median income as of 2008 was about $61k. Harvard room and board for a full year is now about 82% of the median family income.
Further, in 1958 about 28% of married couple households had both husband and wife in the paid work force. Less people were working per household.
As of 2008, that figure is 61%. People are working more and getting less for it. And I haven't even figured in the comparative tax burdens for those two periods, which are higher now than they were then (Example: Federal tax burdens have more than doubled since 1965). Americans are being screwed over - plain and simple.
To save enough to pay for a decent part of that Harvard education today would take a long time - much longer than it would have in 1958. But the government offers the student loan quick fix coupled with higher ed propaganda to herd young Americans off to college where they will party for 4-6 years before spending the next 20-30 paying interest to the banks.
Who benefits from this? The Education Industrial Complex, Sallie Mae, the banks and the DC politicians who take credit for "educating" the nation's youth. They don't care how the problem was caused and they will only offer more of the same, despite the consequences.
What caused this problem? The flood of federal student loans has caused this problem. Other government policies that feed the education industry, based on the ridiculous belief that "more degrees = higher income for everyone" have also caused this problem. The Federal Reserve has caused this problem.
Those policies were short-sighted and have plunged post-1970s generations in a seemingly endless cycle of debt. Remember this when Congress talks about higher ed and "lowering costs" of education by increasing funding for student loans. Remember this whenever the Federal Reserve is mentioned. Remember this when you hear the name "Sallie Mae."
Other sources: Table F-7 http://www.census.gov/hhes/www/income/histinc/incfamdet.html
Fellow law school grads will like this one ;) :