Posted by: crudbasher | July 26, 2013

Eating The Seed Corn? Implications Of Student Debt

CC Wikimedia Commons

CC Wikimedia Commons

Have you ever read an article and have it trigger another thought so profound you actually get a chill? I did today.

I started off reading an article in the New York Times called College Enrollment Falls and Economy Recovers. First, I would quibble with the description of the economy in recovery. 1-2% growth 5 years after a recession ends is not a recovery, especially with the Feb flooding the economy with nearly a trillion dollars a year. However, it’s the New York Times so I understand their opinion.

From the article:

College enrollment fell 2 percent in 2012-13, the first significant decline since the 1990s, but nearly all of that drop hit for-profit and community colleges; now, signs point to 2013-14 being the year when traditional four-year, nonprofit colleges begin a contraction that will last for several years.

How do they know it will only last for a few years? I’m sure the music industry thought the decline in CD sales in the early 2000s was just for a few years too. Who know, they could be right, we will see.

Another explanation for the decline in enrollment in a poor economy means students don’t want to take on a huge amount of debt unless they can be sure they can get a job afterwards. But what about the ones who have already gotten into huge debt and don’t have a job? What are the implications of the huge cost of college? Could colleges be eating their seed corn?

To eat the seed corn – To eat the corn which should be saved for seed, so as to forestall starvation; – a desperate measure, since it only postpones disaster.
 – any desperate action which creates a disastrous situation in the long-term, done in order to provide temporary relief.

If you are in huge debt you tend not to have the money available for starting your life by getting married, buying a house and having children. Are we seeing this happening? Check this out:

Baby bust? National birthrate hits an all-time low due to weak economic recovery

The recession has been over for four years, but the birth rate in the U.S. continues to fall as many people struggle with a sluggish economy and financial uncertainty.

According to a recent analysis by the Pew Institute, since 2007 when there were a record 4,316,233 births, the number of births has been steadily declining, with 4,007,000 births in 2012 – the lowest number since 1998.

The US birth rate has fallen significantly. I thought that made sense considering the conditions the new generation finds themselves in but then I thought: holy cow, these grads should be having children who would themselves be going to college in 18 years.

So this is what hit me earlier: If they aren’t having kids, who will go to college in two decades?

As I have said many times, what will transform education is not some big government program, it will be economics.

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