Rolling in the deep: Student loan debt

Recent college graduates are among the primary users of www.seekingarrangement.com, a website on which rich older men — or "sugar daddies" — help women pay off their student loans in exchange for sex.

In other words, graduates have resorted to prostituting themselves to avoid defaulting on their loans. If you don't believe it, you can watch their story on Dr. Phil tomorrow.

Clearly something has gone terribly wrong in paying the costs of the secondary education system. It's a discussion no one wants to have. But everyone, not just college students, needs to face what we've feared for a long time.

We've created a monster, and it's called student loan debt. I say we — meaning the entire country — have created it because we've all accepted it. From our parents' generation and before, we've learned that to succeed, you need a degree. For them, if that meant taking on a little debt, they did it. The long-term benefits outweighed the costs.

In the past, the doctrine of debt held true. Now, however, the insanity of the figures leads one to question — whether the old system is on the verge of collapsing.

A few facts to consider: In 2000, the amount of student loan debt in the United States was $200 billion. Today, that number approaches $1 trillion. In reaching these astronomical levels, student loans have surpassed credit cards as the largest source of debt in America.

The only thing rising at the same rate as college debt may be college tuition. Adjusted to inflation, tuition has risen 650 percent since 1978.

These ballooning tuition rates have translated into the most troubling fact in all of this: The average student leaves college $27,200 in debt. Some face debt exceeding $100,000.

Naturally, many students cannot come close to paying off these loans. The New York Times reported this week that, overall, nearly 9 percent of borrowers defaulted on their student loans in the last year. Regardless of whether tuition costs are reasonable, it's obvious the amount of debt students have assumed is simply unsustainable.

Take solace, however, in the fact college graduates make about more than $20,000 more per year than those without degrees. So although paying off loans will prove painful for the majority of graduates, they will hopefully prove worthwhile in the end.

But by the same token, the status quo cannot persist. When student loans reach six-figure levels, few jobs offer the earning potential to withstand this burden. We need to eliminate this exploitative aspect of education to prevent graduates from getting stuck paying back their loans ad infinitum. This especially holds true of for-profit colleges — the ones you constantly see advertised on TV, such as the University of Phoenix or Kaplan University. Fewer than 7 percent of students at these universities leave without debt.

Secondary education should not function as business. Just because it has gone in that direction does not mean we should accept this as inevitable.

Something needs to change in the near future if we hope to avoid an entire generation of college graduates drowning in their own debt. Perhaps more students will turn to their state schools to avoid debt, or more drastically, colleges will restructure as institutions to accommodate.

If students continue to take on loans beyond their means, the road ahead may prove disastrous. It's time we aimed for a better solution. Otherwise, we may need a lot more "sugar daddies."

Nadav Karasov is a sophomore economics and psychology major. He can be reached at karasov@umdbk.com.