Out of school and into debt
This post was contributed by Laura Nasr, senior at Mt. Holyoke College (US) who will be part of our new feature column written by university students.
With this in mind, college graduates, faced with record student debt and few job prospects, may decide to go to graduate school to wait out the bad economy.
Those who don’t go to graduate school may be either unemployed or underemployed. Either way, the effect is the same: young adults won’t make a comfortable wage until later in life. Certainly it won’t benefit the economy if a large segment of the population can’t afford to spend.
Even those graduates who find jobs may be crippled by record-high amounts of student debt: in 1999, the last year for which comprehensive data is available, average student debt for students in the United States was $19,400, which was about two thirds of per capita income for that year.
Debt in such high amounts affects the choices—spending and otherwise—that a person will make for years to come.
The economic impact of the recession has been discussed in great depth—as it should be—but it is necessary to consider the human effects as well. Young adults who have to move back in with their parents or live alone but extremely frugally because they are inadequately employed, not employed at all, or living off a student stipend may be more likely to delay getting married and having children. Obviously this would compound the problem of declining fertility rates, among other things.
Just as more students finished high school during the Great Depression because there was nothing else to do, more students will go to college and graduate school simply because they can’t get a job or don’t think they will be able to.
When this happened in the 1930s, it resulted in a workforce that was more adequately educated. There are many people who aren’t finishing secondary school or getting an adequate secondary education. But there are just as many people who will end up overeducated for the jobs they want.
Eventually, this will cause degree inflation—jobs that may really only require a high school diploma will be filled by candidates with undergraduate degrees, and so on.
More education, in itself, will hardly be the worst result of this recession. But it will have an anti-democratic effect if it becomes necessary to have an advanced degree to get a good job, especially considering that tuition costs have continued to rise faster than inflation, and without corresponding help from governments.Thanks to Cedric Maitrepierre for the photo.