The Price of College

President Obama has been arguing for a number of plans to reduce the burden of student loans such as artificially low interest rates and allowing for some loans to be discharged through bankruptcy. Many young adults are struggling with student loan debt. The president’s solutions may temporarily help some, but it will help neither students nor the country in the long run.

I have personal experience with the challenges of student loans as I finished grad school with significant loans. Borrowing for college should not be taken lightly. In my role as an academic advisor, my students often talk with me about student loans when they are considering graduate school. Considering debt before jumping into things is prudent.

I tell my students that student loans are like power tools. With a nail gun you can shingle your roof more efficiently, or you can nail your hand to the roof. So often when discussing student loans, we hear about the people who seem to have nailed a hand and both feet to the roof—$100,000 borrowed for a bachelor’s degree in women’s studies? Where were the parents? There is no bachelor’s degree from any school that is worth that kind of debt.

Most students do not graduate from college with a six-figure debt. The typical student has just over $25,000. Is a typical level of debt a good investment? Most people focus on earning potential. Earning potential is important. Without a good salary, paying off debt is challenging at best.

Another consideration, however, is whether the loans allow for an enjoyable career. When I finished my Ph.D., my student loan debt was a bit higher than my starting salary. The debt definitely cramped our style. The upside was that I had a job I loved. I was happy to get up for work every day. I had the joy of doing just what God called me to do and was probably a better husband and father as a result. From a purely financial perspective the student loans might or might not have been a good investment. From a life satisfaction perspective they were well worth it!

We did make sacrifices. In addition to controlling our spending, I did extra work when I could get it. Sometimes this meant teaching a class during the January intersession between semesters. For two summers I worked weekends at the local pool. I had supervisor in my title, but among my tasks was scrubbing toilets. Yes, as a Ph.D., I scrubbed toilets to help make ends meet. Now, with my loans paid off, I no longer professionally clean toilets, but no honest work is beneath me just because I spent a long time in school.

The challenge for today’s graduates is finding well-paying, honest work. With the economy in shambles it is hard enough to get a full-time job, let alone some extra work to help pay off student loans more quickly. In addition to the poor job market, the Federal Reserve is keeping interest rates artificially low. This makes it harder for colleges to invest prudently and generate money for scholarships. Yes, low interest rates make student loan payments smaller, but scholarships do not have to be repaid.

Allowing young adults to discharge loans through bankruptcy would remove weights from their backs. However that bankruptcy will follow them for years. Therefore financial goals such as buying a home will not be made easier by bankruptcy. Furthermore, if student loans become easy to discharge through bankruptcy, fewer students in the future will be able to borrow money for college. They will have the choice of whether or not to use the power tool of debt taken from them. Students from poor families with parents who cannot cosign loans would be hardest hit as they would not be able to invest in themselves to create economic opportunity.

There is a solution to the student loan problem for typical borrowers—economic growth. As young adults and those who love them consider the presidential race, I hope they will consider that a low interest rate on student loans is not helpful when people cannot find good jobs. People who borrowed prudently do not need wealth redistributed to them. We need leaders who will create conditions in which graduates can get good jobs and have the satisfaction of using their God given talents. People go to college to make something better of themselves. A thriving economy will let people accomplish their goals and pay off their loans.


Dr. Joseph J. Horton is professor of psychology at Grove City College and a researcher on Positive Youth Development with The Center for Vision & Values.

Dr. Joseph Horton


Dr. Joseph J. Horton is professor of psychology at Grove City College and a researcher with The Center for Vision & Values.

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  • eyeclinic

    We need to make colleges accountable, by having them hold and disburse the loans. That way, they will incur the cost of financing educations for students that have little to no hope of obtaining gainful employment. Only then will they stop producing graduates with meaningless degrees and overwhelming debt. Only then will they limit the useless degree programs they offer. Only then will parents realize that their litttle Tom or Suzie is not college material. This will limit the need for colleges and universities,encourage competition, and reduce overall costs.

  • Ann

    That might or might not help. What we really need is for society to drop the narcissistic attitude and for everyone to be realistic about what they can contribute to society (and not to their own sense of “self-worth”), and for parents to be realistic about what their child truly is capable of doing (and in conjunction, to hold the child accountable for their lack of success at school). Just because you enjoy something does not mean you are 1) called to it, 2) good at it, 3) able to make a living at it.

  • Michelle Marie Allen

    Your tone sounds a bit arrogant. And praytell who would determine who would do what to contribute to society ? At what age would this determination be made for a future student or apprentice in a trade ?
    Your statement is totally absurd in that we live in a country which guarantees the freedom to choose. By your standards, Albert Einstein would have been relegated to stay in his job during his 20’s as a patent office clerk because he was considered a “learning disabled” student when he was in his early education days.
    The ridiculously high cost of education is what needs to be addressed not taking away the right for any individual to choose what they will pursue in the area of higher education. And by the way, many college students are older adults with families who work and go to school. My dear grandfather went to evening classes and drove a beer delivery truck with his brother(they were both abandoned when they were 6&7 years old respectively) during the depression. He also had a wife and 3 children to support. He was a talented and gifted man who obtained a degree as an engineer who had designs of many aircraft engines cross his drafting table. People like you would have him in poverty because his early education wouldn’t have reflected his dormant abilities and intelligence which by your statement would have deemed him not “qualified” to obtain a higher level of eduction.

  • kg

    Sorry, guys. The only thing that will bring the cost of college down is competition. The middle class is finally starting to reject the high cost of ‘traditional’ universities for community colleges and trade schools. I went to a private, liberal arts school (class of 2000). My peers and I have lived through the ‘debt-for-diploma’ age and I can promise you we will not let our children make the mistake we made. Namely: paying for swanky dorms, state-of-the-art fitness facilities, athletic teams, class trips, etc. that do not help you get jobs when you graduate. This whole higher education paradigm is going to come crashing down in the next 15 years and it will have everything to do cost.

  • Proteios1

    We do. We expend major amounts of our budget towards scholarships..what one faculty member disparagingly referred to as buying our students. But a don’t agree. We must compliment pell grants, subsidies, parental funds and loans by returning some of our tuition to the students.
    But we all know math. To do that means I, as a faculty member don’t get raises very often. Gas prices went up for me too. But I accept this as I love my job. And math lesson two…if I give money as scholarships as you suggest..and we do, by how much of another students tuition do I have to increase. Right now, stimates are that around 40% of tuition is to support scholarships, affirmative action and international students.
    This means if everyone just paid their own way, tuition would go down..a lot. So I’m right there with you on helping students out. But we’re not the fed who magically just prints more money. It has to come from somewhere and right ow its primarily other students tuition and fees.

  • I was college material and I did well. I always saw college as a way to get my family out of the poverty we were in (I was homeless periodically though college) Then when I graduated, I couldn’t find work. What should be done about people like me who’s hops and dreams depended on college and who’s hopes and dreams are now shattered by debt and inability to find work? By the way, I don’t support Obama or anything he does.