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College students are now more than a trillion dollars in debt. That comes as news to anyone who isn’t a college student or the parent of a college student. The young and old who graduate this year are quite aware of it. Last year’s college grad started working life — if he or she could find a job — with an average debt of $27,000.
That average of $27,000 is the debt owed only by the student. Mark Kantrowitz, a knowledgeable expert in the field of student loans and student debt, estimates that if you add in the loans taken by parents to pay for their kid’s education, you get an average total bill of $34,000. That was last year. The numbers have been getting worse, year after year. (Kantrowitz was quoted in the New York Times last year, saying that student debt goes up and it doesn’t ever go down.) If student debt goes up 5 percent this year, as it did last year, then the burden — well, you can do the depressing math.
The economics of borrowing and debt often inspires comfortable moralists to criticize the profligate borrowers. But there’s been no criticism of students’ or parents’ borrowing. Over the past 30 years the purchasing power of the middle class has remained flat or has declined. Our average worker hasn’t been able to make the necessary strides ahead of the cost of living which permits increased savings or increased purchasing. But in that same period, the price of a college diploma has steadily gone further and further ahead, rising between 4 and 6 percent a year.
As has happened repeatedly over the past three decades, parents — and now their college-bound children — have to borrow. The gradual erosion of the middle class has increased so that now we are witnessing something rather like a collapse. The rich float further and further up, the poor drift further and further down.
But that’s a terrible note to post during the month of college graduations, so we’ve illustrated this with a diploma from the Italian University of Messina in 1672. We think it’s a great diploma with great but serious colors, a truly intricate initial letter and fancy writing. That’s something worth hanging on the wall! Even if it does put us a bit in debt.