As the various Occupy encampments have been dispersing in cities across the country, whether due to colder weather or fed-up mayors, their determined participants are looking for other ways to advance the splintering agenda — blocking a port here, occupying a house in foreclosure there. One of those offshoots is Occupy Student Debt, which, as the name indicates, demands the summary forgiveness of all student loans.
Like so many of the Occupy demands, OSD is a curious one, as if freedom from burdensome circumstances, even those brought on by the individual’s own decisions, is somehow ensconced in the Constitution.
Comedian Adam Carolla went on a rant about this self-entitled mentality of the Occupy crowd, suggesting that what we are seeing is the coming of age of the first “everyone gets a trophy” generation. Young adults who have been told since childhood that everybody is special, that there are no winners and losers, are finding that the real world is not so forgiving. There are, in fact, winners and losers, and preparation and hard work, not an over-groomed sense of self-esteem, give one a better shot of ending up in the former category.
There is some truth to Mr. Carolla’s “everyone gets a trophy” theory, as it would explain how a group of 20-somethings in a drum circle could fancy themselves on par with Egyptian demonstrators being set upon by their army’s soldiers and tanks — it’s an international bond of “taking on the man,” details be damned. What we are also seeing, however, is the inevitable result of “everyone goes to college.”
For years now, politicians on both sides of the aisle have nearly tripped over themselves in an effort to “make college more affordable,” with the Obama administration taking that slogan to dizzying new heights. It makes for a good sound bite and even better politics, but the reality is that government can’t make college any more affordable than it can luxury automobiles. Government policies can make loans easier to get and establish more accommodating repayment terms, but the price tag of the item to which one applies that loan is set by the market.
If Beltway politicians were to start a low-cost loan program for BMWs, for example, it would do nothing to lower the price of that particular brand — it would only encourage more people to take out the easy money and buy a Beemer. That, in turn, would force BMW to increase its prices as a way to balance out supply and demand. In this manner, government intervention only distorts the market, as the recent housing bubble so harshly displayed.
In the case of higher education, colleges and universities set tuition, not Uncle Sam. And here’s where the ugly cycle kicks in: Easy loans and hollow slogans about “college for all” drive up demand, which means institutions, knowing they will have a steady stream of paying customers, can raise prices.
Combine that dynamic with the increased peddling in softer disciplines, such as ethnic studies or comparative cultures, and the results are almost predictable: Someone graduates with a master’s degree in mushy studies and $90,000 in student debt into a dreadful job market with little demand for such skills; it is only then they realize that they may have been misled.
Our problem is not that we have too few college-educated workers, but rather a lack of workers coming to the job market with the necessary skills: either specialized vocational training or college backgrounds heavy in math, computer science and engineering. A recent story in the Financial Times touched on the difficulty of many companies in finding skilled workers such as machinists, software engineers and complex equipment operators. The article referenced an October 2011 report issued by Deloitte and the National Association of Manufacturers, which stated that U.S. manufacturers have 600,000 unfilled positions because of a lack of qualified workers.
So there’s a gap begging to be filled, yet the current system steers too many young adults in a thousand other directions, leaving them little to show for it other than an expensive piece of framed vellum for the office wall.
Lost in this mad rush for a higher education is the old-fashioned notion that college, while certainly a great experience for many, is also not for everyone. Around 50 percent of incoming students don’t go on to get a degree, a statistic that has barely budged in recent years despite ever-increasing enrollment numbers.
Yet Washington continues to double down on its efforts to “make college affordable,” with little regard for the actual results. More and more students march into the voracious maw of higher education, only to drop out or be spit out, disillusioned and burdened with debt at the other end.
Should the Occupy Student Debt protesters feel cheated? Absolutely. Wall Street banks, however, had nothing to do with it. As with much of the Occupy agenda, the ire is misdirected.
A recovering socialist, Matthew Bastian lives in Hamilton. He works in the financial industry.