As student debt continues to rise, it threatens to to hobble borrowers and the economy for years to come. How did we get here? It’s certainly not what our founding fathers had in mind. (thisisbossi/flickr)

Here’s a comforting back-to-school thought: Baby Boomers are basically bankrupt. Our accumulated wealth (remember home equity?) has been mostly wiped out. And the culprits — big bad bankers — have now turned their attention to the next generation. Student loan debt recently topped more than $1 trillion– an unimaginable sum.

And if you think college kids are getting those low interest rates that bankers charge each other, think again. The good news is that, unlike us, our children won’t have to worry about getting fleeced out of their fortunes — because they won’t have any. Today’s diploma comes complete with its own back-breaking mortgage. And the first payment’s due right after graduation — whether they have a job, or not.

America built a 20th century economic juggernaut on the backs of land grant colleges, the G.I. Bill, and an unshakable belief in free, public education as a right of citizenship. But that was in a previous century, when we bought stuff with pay increases instead of payday loans.

Congratulations on your commencement. Let me be the first to welcome you to the community of educated men and women… i.e. indentured servitude.

That’s just what America needs: Our smartest kids saddled — straight out of the gate — with the kind of crippling debt that can only zap their ability to contribute to a growing economic pie. Whose idea was this?

Certainly not the Founding Fathers.

Thomas Jefferson was a governor, congressman, secretary of state, vice president, and, of course, president of the United States. Yet when he finally got around to writing his own epitaph not one of these noteworthy accomplishments even made the cut.

Instead, Jefferson wished to be remembered simply as the author of the Declaration of Independence, and the father of the University of Virginia — a free, public college. Why? Because he believed that the only way our country could survive and prosper was under laws that were “wisely formed and honestly administered” by a citizenry educated at the “common expense of all” and without any regard to “wealth, birth, or other accidental condition or circumstance.”

Thomas Jefferson’s proudest achievement, according to the headstone he designed for himself, was founding a college where any student smart enough to earn admission could attend — regardless of means. In Jefferson’s vision of this republic, a college education was a necessity — not a commodity. He wasn’t alone.

Abraham Lincoln — with a stroke of his presidential pen – made more than 17 million acres of federal land available to states free of charge for the sole purpose of creating “land grant” colleges. You may have heard of them. They include: Cornell, MIT, Auburn, Rutgers, Purdue, Penn State, Ohio State, Clemson, Texas A&M, and Oklahoma — just to name a few.

Up until the 1980s, the University of California — one of the best land grant colleges in the country — was free of charge. Unfortunately, America got tired of having the most educated citizens in the world. So we abandoned the old system of paying for public colleges with public funds and then holding those colleges accountable for their expenditures and outcomes. Instead, we adopted the current system where banks give loans to folks who can’t afford them in order to underwrite unrestrained increases in the costs of whatever those poor people are buying — in this case, higher education.

In the words of Thomas Jefferson, college education in the United States of America must never be a function of ‘wealth, birth, or other accidental condition or circumstance.’

How’s that approach working out for you?

America built a 20th century economic juggernaut on the backs of land grant colleges, the G.I. Bill, and an unshakable belief in free, public education as a right of citizenship. But that was in a previous century, when we bought stuff with pay increases instead of payday loans.

Let’s face it. Anybody with an ounce of common sense knows that what was true for Thomas Jefferson is even truer today. College education in the United States of America must never be a function of “wealth, birth, or other accidental condition or circumstance.”

And yet, for the past 30 years, on so many levels, my generation has been swindled. Our kids are next. And we should be hopping mad at today’s denizens of Washington DC who spend all their time draining cocktails on K Street courtesy of unscrupulous money lenders, instead of heeding the words etched in stone on nearby pedestals where Lincoln still sits and Jefferson still stands.


Tags: History

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  • dust truck

    Another thing that’s in the constitution: Bankruptcy. And yet student loans are nondischargeable because politicians in the late 90s thought too many Doctors and Lawyers were getting off scott-free by abuse the bankruptcy system (even though that was a total lie.)

    Just more proof of the corruption and fraud that the banking industry has foist upon the American people for the past 30 years. This isn’t capitalism, it’s outright THEFT.

  • road.rep

    So stop spending that kind of money on college. Do your first two years at a local community college for about $1000 a semester. Complete the next two years at a local state college or university while living at home. Or, even cheaper, take all of your classes at night. You may not get the “college experience”, but you will get the college degree for 10% of what the “college experience” will cost. And any truthful college coach will tell you that a degree from one of the top 20 colleges in the country, or the Ivy League, is worth more. But the rest are all about the same….including that degree earned from the local state college for 10% of the regular cost.

    • jefe68

      That would work if the community colleges were prepared for more students. Which they are not. They are already over flowing with students and woefully underfunded. Why? Cuts in state budgets and in some states deep cuts indeed.

      When I read comments like this I think, well another false equivalency based on little or no understanding of what’s going on in higher ed in this country.

      • road.rep

        If you are a parent or student reading my comment, you probably have only one degree to earn….yours. And there is plenty of room for one more student. Don’t let jefe68 and his hand-wringing perspective deter you. Get your degree, and don’t pay big money for it!

    • momof2girls12

      It doesn’t matter how much money an institution costs or doesn’t cost- if a student is borrowing money to pay for it, why should the government make a FORTUNE off the student? 6.8% for a student loan (the current LOWEST rate) is reprehensible.

      • Lad L. Dell

        I am over-simplifying this topic, but once the importance of a college degree is established, more people go.

        As more people go (even those who can’t afford it, because of financial aid), colleges see more applications and potential for “improvement” (their reputation, perhaps their bottom line). As competition rises for these applicants, colleges spend more to be more attractive. This spending inflates budgets that can’t be balanced. These colleges raise tuition and fees. This cost gets passed on to the consumer, I mean “student”. The financial institutions step in with loans and the govt gets involved as well…you see where this circular argument is going…students take out more loans, the colleges get paid and the banks do too until, potentially, this bubble gets to big and there are massive defaults and it all bursts. Does this sound familiar? I hope this isn’t the case.

        It’s an issue of supply-demand, opportunism (greed) and self-interest…among others…

  • Linda Merrill

    Hi Nick! Thank you for this perspective! I keep shaking my head when the politicians on the stump or in debates, or the media, talk about the sorry situation about student loans and blames the banks, or lack of government grants, and no one talks about the ridiculous cost of tuition/fees/room and board itself. That easy access money (hard to pay back, though!) has enabled colleges/universities to charge ever increasing sums, and provide more and more sumptuous living quarters, without having to account for their expenditures. The value is just not there for nearly any student at this rate.

    • Nick Paleologos

      Hi Linda. I second that emotion. There is no magic bullet. But let’s begin by having high quality public colleges which qualified kids can attend without having to borrow any money at all. And then follow that up by imposing cost control requirements on all private colleges accepting public (or publicly guaranteed) funds of any kind—including student loans. Finally, before you let the banks off the hook, try and remember the last time they used their considerable clout to make things better instead of worse.

  • Donald Sutherland

    Student debt is everyone’s problem.
    Education, like healthcare, should be a national priority with government sponsorship and price setting.
    Under the current profit driven system tax payers end up paying more for less.
    In Massachusetts, state education and healthcare costs are almost 70% of the states budget!!!!

  • Jeff

    Notice, these liberals never question *why* college is expensive. If the price of gas goes up a nickel or a dime with a Republican as president, all hell breaks lose in the media. Colleges gouge students and their parents off their hard money and the focus is on getting the taxpayer to pick up the bill. But never the reason why college education got so expensive. There is a simple explanation for that.