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by Fred
Kirby March 23, 2005
 Students
at universities and colleges face an increasing debt burden as costs for
post secondary education continue to rise.
There is a social cost to this debt load carried by our young. In many
ways their lives are put on hold. Making the big purchases on graduation,
getting married, and buying the first house are no longer automatic.
Promising students hesitate to enter graduate school to incur further
debt.
The average debt a university undergraduate carries is between $20,000 and
$30,000. The debt incurred for post graduate and professional school
increases two and threefold. Interest and repayment start six months
following graduation. As with any bank loan, these payments are due
whether you were lucky to secure well-paying employment, wasting your
education in McDonald’s, or unemployed. Even if the graduate finds work in
his or her field, he or she will start with an entry level salary and, as
is most likely the case, that job is in a large urban area, where the cost
of living can be another limiting factor. Today more and more young people
are questioning the practicality of pursuing postsecondary education. They
lose and all society loses with them.
The lack of economic activity affects us all as decreasing educational
opportunities put us at a disadvantage in this information age. It becomes
a self-fulfilling downward spiral for the country. The knowledge economy
leaves us behind.
Governments, industry, and society as a whole all benefit from an educated
and trained population. Student debt is not just a student problem; it is
our problem.
There is a better way to assist students with their crippling debt load
and become productive. Take the banks out of the student loan business and
replace them with the federal government using an instrument other than
loans. Then use the income tax system as a means for students to repay.
Let a student be assessed 1% - 2% of taxable income starting at
graduation. Repayment is then based on income. Loan defaults disappear,
bankruptcy by students is avoided, and students have a better chance to
plan a future. This would be the first step to solving the problem.
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