Over at Forbes, Hardeep Walia zeroes in on one of the key factors driving the student debt crisis: loans are often given out with little regard to students’ future earning potential. STEM students, for example, have more jobs open to them and earn far more on average than, say, philosophy students, yet both are treated as equal when it comes to applying for student loans. As a result, a loan may be reasonable for one student but far too high for another, even for people of similar socio-economic backgrounds:
Facts are stubborn things, and the fact is that students in certain majors will have a hard time paying off their loans. Some majors lead to jobs with starting salaries of $98,000 a year. Some lead to starting salaries of $20,000. The loans needed to earn a degree at a private institution costing more than $50,000 a year don’t fit a social worker’s salary.Obviously, if people don’t need loans, then they can major in whatever they want—and the likely salary upon graduation shouldn’t be the only criterion for picking a major. The world needs people with the kinds of skills that humanities majors develop. The world needs social workers, too. In fact, government might decide that some of those going into social work should have their educations subsidized so that they can start their careers with little or no debt—but any subsidies should be explicit, not mixed in with policies in lending.
This is a good point, and Walia’s call for lenders to evaluate the earning potential of the degree a student aims to earn bears serious consideration. Aspiring scientists, engineers and doctors come to college looking for something very different than philosophers and artists, and their financial aid packages should be better tailored to their goals. More broadly, greater distinction between skills training and liberal arts education would help clear away some of the curriculum clutter that has reduced many a B.A. to a meaningless credential.[Ball and chain image courtesy of Shutterstock]