Wednesday, March 28, 2012

College debt peonage

Crooked Timber has an interesting piece that discusses the situation of our “debt-enslaved” youth.  I think he makes some good points, although I also think he is somewhat sideways to the issue.

Malcompharris, Out of the Crooked Timber, 23 February 2012 (Hat tip: MR)

Eeconomist and blogger Mike Konczal has parsed the data from the “We Are The 99%” tumblr that became a digital catalog of the individual motivations behind (the overwhelmingly young) Occupiers and their supporters, and concluded that “The overwhelming majority of these statements are actionable demands in the form of (i) free us from the bondage of these debts and (ii) give us a bare minimum to survive on in order to lead decent lives (or, in pre-Industrial terms, give us some land) . . . these are the demands of a peasantry, not a working class.”

As of 2009, 37 percent of American households headed by someone under 35 have more debts than total assets, which doesn’t even count over half of those under 24, who live with their parents. That’s a recipe for social instability, an organization less structurally sound with regard to popular uprising, Graeber would argue, than most slave societies.

There’s a particular affect that David identifies with “the debtor who feels he has done nothing to deserve being placed in his position: the frantic urgency of having to convert everything around oneself into money, and rage, and indignation at having been reduced to the sort of person who would do so.” It’s not just the humiliation and dispossession endemic to inequality and hierarchy, but a particular feeling of being reduced to what Evan Calder Williams has called “meat on the hoof.” The feeling of walking on rented legs that always threaten to wander back to their true honors.

The reason I believe he is sideways to the issue, is that I think he is miss-framing the problem.  It is not that we have a working system that has become unbalanced.  A system where the parent (society) hands an invoice to our children (society’s youth) at the age of 21 and says “pay us back.”  What we have is a society that cannot maintain its current economic wellbeing. 

Look at it from a highway infrastructure point of view.  We currently do not have enough money to maintain our bridges and highways in adequate condition. 

1.      We can choose to cutback on the highways and bridges that we currently have to the point where the current repair budget is adequate (asset reduction).

2.      We can borrow money to pay for repairs and shift the general spending into the future (future wealth reduction)

3.      We can take the money from some other area of spending to pay for the repairs (service reduction).

4.      We can borrow money to pay for the repairs and pay for them with toll roads that require specific end-users to pay for their upkeep.

The first option is analogous to cutting off all student loans and having a pay-as-you-go system.  The cost of education would likely go down, but it is none-the-less true that less people would be getting themselves educated.

The second option is pretty much what a debt jubilee on education does.  Transfers the cost of education to the general public.  As we do not have enough money to pay for all this on an ongoing basis, the net result would have to be either the first (less education) or third (less something else) options eventually.

The last option is what is being done with the student loan situation.  We can no longer afford to educate our children gratis, so we have them pay a toll.

The problem is that we do not recognize the danger that the future outcomes may not be sufficient to pay for the inputs.  What if the receipts are not enough to cover the costs, and what if that toll booth is at the end of your driveway, not only on specific roads.

And there is the trap.  You get on the toll road to get to work, but the toll takes half of your income.  You get yourself educated, and the loans eat up half your income.

Now it is all very true that you can abandon your car and walk everywhere, and you can abandon your education and live in a little trailer on junk land to keep your costs close to zero.  These are choices. 

But these are all choices of people who are poorer than we believe ourselves to be.


dennis said...

Option #5, We can scrap the system we have and build a wall less, low cost, school system. The "degree" would be based on what you know. Not what class you took.

Degringolade said...

I really believe that the education and the credentialing system is unsolvable with the current set of beliefs rampant in this country.

Education is nothing more than a set of hoops for folks to jum through in search of a better paying job. There are vanishingly few in the college system bent on learning, just a bunch of folks grinding out a set of high-priced classes, promptly to be forgotten, that will enable them to join the guild of their choice.

russell1200 said...

Obviously a concerted attempt to force me to respond using somethin other than first initials; LOL

Dennis: You could probably cut down on the brick and mortar, but not everything can be taught well online.

People is that if the degree becomes too important, people will always game the system. Why the degree is over valued is a different problem which I have commented on in my various credentialling crises posts. Such as:

Degrignolade: I agree with you up to a point. But from my experience, if a student is motivated to learn, they can still get a lot out of college. I had a post on it recently I think. It was obvious that only about a third or less of the studetns in universities wanted to learn anything.

Erisian ( said...

as a friend of a number of perpetual students, extending education to put off repayment..

as a friend of a number of perpetual students, continuing school because they forgot how to not be in school..

as a friend of a number of graduates who are pumping gas..

i believe that the solution would be to remove the emphasis on extended education being the difference between a good life and an "okay" life. When there are too many people with degrees, the degrees and education behind them lose value. this directly impacts the cost of and upkeep of the institutions which provide the education.

i dunno.. this is more of an "over beer conversation" than an "on the internet conversation"..

russell1200 said...

E: Please feel free to have a cold one while typing away. Just don't spill any on the keyboard. :)

My general feeling is that it is an arms race, weighted in favor of the relatively well off, to gain favored postions. The no pay internships also fit very well in this catagory.

A professor friend pointed out to me a couple of years ago that very few English Department professors came from the boot strap crowd. They almost always had to have family support while they went through the long haul toward a not particularly well paying position.