Condemned to debt

Attend college at your own financial risk. Skipping college and going straight to work is one of the wisest financial decisions a high school student can make in the short term. For college students today the wages of college is debt, and most college education is not worth the debt.

I recently worked out my finances with a financial firm and with all of my assets and liabilities (including my house), I have a net worth of negative $52,659. I did not know a negative net worth was possible. It's my fault, too. Why did I loan my way through two seminaries compiling over $60,000 in loan debt? If I didn't have the cash, should I have gone to graduate school at all? My only twisted comfort is that many of my peers are in similar debt-anchored boats (except for the ones who went straight into the business world or engineering, for example).

The Christian Science Monitor reports that for college graduates the average loan debt was $17,600 in 2004 and $22,581 in the case of private colleges. Average indebtedness of graduate students overall is $31,700, according to a Nellie Mae Foundation report.

Here are some school loan facts for recent grads from Tamara Draut author of Strapped: Why America's 20- and 30- Somethings Can't Get Ahead:

The maximum Pell Grant award, the nation's premier program for helping poor kids pay for college, covers about one-third of the costs of a four-year college today. It covered three-quarters in the 1970s. In 1948, veterans received a grant of $500 a year, enough to pay for all but $25 of tuition at Harvard. In 2003, the average federal grant to students was $2,421, which falls $24,000 short of tuition and fees at Harvard. In 1977, college students borrowed about $6 billion (2002 dollars) to help pay for college. College students borrowed $56 billion in 2003. The number of students enrolled in college grew by 44 percent between 1977 and 2003, but student loan volume rose by 833 percent. Three-quarters of full-time college students are holding down jobs. Only 53 percent of all students who enroll in four-year colleges end up getting their bachelors degree within 5 years. If current enrollment trends persist, over the next decade 4.4 million college-ready students from households with income below $50,000 will not attend a four-year college and 2 million students will not attend any college. In 1972, the typical male high school graduate aged 25 to 34 earned $42,000, in inflation adjusted dollars. Three decades later, male high school graduates in this age group are earning just over $29,000. In 1972, a young-adult male with a bachelor's degree or higher earned on average $52,087 (2002 dollars). In 2002, young male college grads earned $48,955.

As the cost of a college education balloons, the capacity to pay back school loan debt has not followed suit. Many argue that federally subsidized loans are part of the problem. Because colleges are under no market constraints to control costs associated with tuition dollars administrators have been less responsible with budgets.

Being condemned to education debt affects graduates' vocational decisions. I once attended a church where, only after a few months, one of our bright young pastors abruptly left for another church because it agreed to pay off his school loans immediately and entirely. I know another guy who will soon leave ministry altogether to work in "the real world" so he can pay back school loans largely acquired after saying, "I do." Getting out of the debt is the "responsible" thing to do.

Granted, school loan debt is the choice of the student. If you do not want school loan debt, then do not go to college or graduate school some will say. "Skipping college is the best way to be debt free." By the way, is college really necessary for a "comfortable life" anyway?

In the face of explosive debt, perhaps we should ask students better questions. Should the accumulation of debt drive your decisions about whether or not to attend college, graduate school, or whom you should marry? Is it wise to delay major education decisions if you don't have the cash, even if it means delaying college, seminary, professional school, or not going at all. In the end, is the debt really worth it?

Finally, I wish parents would stop instilling fear and comfort idolatry by threatening, "If you don't go to college you'll be flippin' burgers for the rest of your life!" This fear is a misleading deception. If a student has $50,000 in school loan debt coming out of college he may find himself "flippin' burgers" after all.