I am very clearly and much more candidly not an economist. My knowledge of the World Bank, global financial holdings and stuff like that excuses me from every conversation and, for this, I am truly grateful. I’ve got enough on my plate. But I do know GNP stands for Gross National Product and it is an important measure of any country. The GNP is, by definition, “the market value of all the products and services produced in one year by labor and property supplied by the citizens of a country.”
The four big parts of the GNP are personal consumption, business investment, government spending and net exports. But where I want you to focus is the same place that I did a double-take the other day. The United States has the highest GNP of any nation in the world but a full 7.5 percent is loans made to college students. In the last quarter of 2016, our student loans had grown to almost $1.4 trillion (with a ‘T.”)
We have approximately 43 million people with college student loans with an average balance of $30,000 each. This is sheer lunacy. We’ve got our best and brightest with staggering debt before they ever get a job. One expert, Ellen Brown, points out: “Graduates leave college with a diploma and a massive debt on their backs, averaging over $37,000 in 2016. The government’s student loan portfolio now totals $1.37 trillion, making it the second highest consumer debt category behind only mortgage debt. Student debt has risen nearly 164 percent in 25 years, while median wages have increased only 1.6 percent.”
Actually, it is worse than that. ValuePenquin claims, “In aggregate terms, the total student loan debt outstanding in the country was $346 billion in 2004, and has ballooned to $1.23 trillion as of late 2015. This represents a more than 250 percent increase in total student loan debt in just over 10 years.”
Who do we see about this flimflam that is making virtual financial slaves out of millions of American citizens? Forbes alerted me to this horror when they reported 94 percent of the 28,000 students at UT-Knoxville have student loans. If the average loan is in the mid-$30,000 range, that’s more than a degreed teacher will make in a year.
Here’s another tidbit from Forbes: “Public college tuition has jumped 33 percent nationwide since 2000. College students are facing a roughly $20 billion increase in the cost of their federal loans.”
At the University of Arizona, tuition jumped from $2,217 in 2000-01 to $10,581 in 2014-15. That’s an increase of 228.9 percent. Hello? During the same time frame, at LSU-Alexandria it went from $1,914 to $6,009 (214 percent) and South Carolina-Beaufort jumped from $3,014 to $9,404. Colleges and universities all across America were doing the same thing which increased student loans where today they may be America’s biggest cancer.
Are you beginning to see how this works? In just the last 10 years, student loan debt has doubled or, more simply put, by over 200 percent. Business Insiders writes that students who graduate with $34,000 in debt is up 70 percent higher than 10 years ago. That’s why there is an 11 percent loan delinquency and the ability to pay off just the interest on these loans is getting harder and harder.
Anytime you hear some college president espousing that the only desire is to educate tomorrow’s future, get him to go to the bursar’s office and look at today’s present. In the summer of 2015, former University of Tennessee President Lamar Alexander said in his role as chairman of the Senate Education Committee, “Paying for college never is easy, but it’s easier than most people think."
That’s completely false and, with student tuition jumping over 260 percent since he left Knoxville, perhaps he can explain why today our Congress has allowed 43 million American people to be holding the bag on $1.4 trillion (with a “t”) in debt. There are people in our community who are staggered because they’d do anything for a college education.
So they did. America’s politicians are responsible. Vote wisely in 2018.