Barack Obama has promised America's miseducated Millennials to keep the student-loan bubble from bursting. Campaigning in Iowa, the president vowed to keep college affordable, because, like every other welfare and warfare program, it "is at the heart of who we are." ©2012 By ILANA MERCERWND & RTApril 27
Interest rates for Federal Stafford Loans are set to double from 3.4 percent to 6.8 percent, on July 1. You just know how bad things are when a socialized financial market like student loans attempts to correct itself. Nevertheless, if the glut of miseducation is to be curbed, higher interest rates are healthy.
Why the president's promise? The 26th Amendment, smuggled into the Constitution by statute, artificially swelled the ranks of Democratic voters by millions of 18-, 19-, and 20-year-olds. While they don't work for a living, youngsters get to vote for dibs on the livelihood of those who do.
It's Happy Meal time for the nation's students. Obama wishes to extend higher education to many more young Americans.
But how well is this education system performing? Fifty percent of new graduates are jobless or underemployed, says USA Today. They might as well have added "unemployable." The New York Post told of the heartbreaking story of "John Smith, 31," who has earned a master's degree. The Brooklyn resident "works part time at a Trader Joe's because he hasn't found work in his field for over a year."
Smith is dogged by a debt of $45,000. "His girlfriend, Meropi Peponides, 27, a graduate student at Columbia University, will have over $50,000 [in student loan debt] by the time she graduates."What exactly is Mr. Smith's field of endeavor we are not told.
The article's premise, however, is that with a master's degree—any master's—one should not be doing menial work at Trader Joe's. However, the fact that so many Millenials can't figure out one small thing speaks volumes about the quality of the education for which they are hopelessly in-hock.
Don't pursue an exorbitantly expensive master's which prepares you for packing shelves at Trader Joe's, and no more.
The future, as job reports show, belongs largely to a cognitive elite that can invent, design, perfect, and generally manipulate highly complex technology. This requires a science, technology, engineering or math degree. But only a fraction of enrolled students has the intellectual capacity for STEM degrees. And, according to the Higher Education Research Institution at UCLA, while "nearly 31 percent of all students who entered college in 2009 planned to major in a STEM discipline," a staggering 22 percent dropped out.
Our check-out boy was able to impart that "he has sent out about 200 résumés in his search." Smith was "looking mainly for work with," wait for it: a "nonprofit organization." The master's degree for which Mr. Smith had incurred $45,000 in student-loan debt once qualified him for the nonprofit niche, which, incidentally, is often spawned and sustained artificially by state-issued, low-interest, funny-money loans. According to LearningToGive.org, "The second highest source of income [for nonprofits] is government grants or contracts."
Student debt is approaching $1 trillion. And, "Outstanding education debt surpassed credit-card debt last year for the first time," confirms Bloomberg.com. Students, it would seem, are acquiring an empty and overpriced schooling.
The housing house-of-cards is not the only "bubble in search of a pin" in modern-day USA. The intellectual bubble is begging to be burst too.
But not if Obama and Mitt Romney can help it. Before backtracking for political expediency, Romney wisely recommended that the housing market be permitted to bottom out. "Don't try to stop the foreclosure process. Let it run its course and hit the bottom," he counseled.
But on keeping loan rates for students artificially low, and the trillion-dollar education bubble afloat—Romney stands with Obama.