Yes, you've been lied to.

Loan forgiveness news is everywhere right now. But, really, what have been some root causes of this student loan mess? Lots of culprits out there, but one stands out; our culture preaches the wrong message about “going to college.”

The first part of the message, crafted in the 1950s-1980s, was simple and enticing. If you go to college, you’ll qualify for a “good job”; should you need to take out loans, that “better job” with higher pay will enable you to pay it back. Sounds good until it just isn’t true anymore.

Here are the statistics: Below is the percentage of people, by gender, who have completed 4 or more years of college, by graduation year.

1976 2021 45 years apart

Male- 18.6% 36.6% 200% increase

Female- 11.3% 39.1% 350% increase

45 years ago, a college degree, in ANY subject was a relative rarity in our country. Scarcity generally creates a higher perceived value. While those holding college degrees are still below 40% of high school graduates, the perceived value of that degree is being questioned and challenged. And, in many cases, it should be.

Sadly no one changed the message drumbeat into society’s heads- get ANY college degree no matter the cost to get a better life. But that cost has proven to be a millstone around millions of students’ necks.

Here’s the second part of this wrong message; it’s too easy to borrow, and you have to borrow too much.

I call it Funding the Dream Factory. Don’t tell me anyone at age 18 has a CLUE what a pile of loans will mean down the road. I know I didn’t. Today, the high dollar amount borrowed combined with high-interest rates impacts students’ budgets for decades to come. In addition, when adjusted for inflation, the actual wages of the middle class as a group have barely ticked upward for the past 50 years. So much for the college degree being a ticket to a financially better life. With a little research, you can have a great paying job in high-tech, trades, or other specialties without a college degree.

Here’s the third, and most hidden truth; colleges are in collusion with the easy loan problem. Make no mistake, colleges and universities have taken full advantage of this waterfall of money pouring into their systems. They have propped up ancillary departments spitting out degrees unchanged for decades; or offered designer degrees in equally questionable fields. They have bloated administratively, reducing the ratio of teachers to administrators from 2-3:1 to 1:1. All this is paid for by the incredible hikes in college tuition & room and board. The bill is funded through student and Parent Plus loans.

When I ran my small business, I met a range of folks from all walks of life. One person told me a horrifying tale I have never forgotten. First, she was a perpetual graduate student with both feet in two different advanced degree programs (?). When I asked, she said she loved them both, and couldn’t make up her mind. About every 8 months, she would run out of money, and one or the other departments would throw some scholarship funds her way. Sadly, it was never enough, so she still had to borrow more in Grad Plus Loans. All I know is this: she was strung along by BOTH programs at our local University. She told me she couldn’t repay her loans when they came due. So she kept borrowing and hoping something good would happen. I’m sorry to say we lost touch, but I wonder if she ever even earned one or the other graduate degrees? And, if so, was it worth it?

I can’t fix the past. And, contrary to statements on Facebook and social media, this forgiveness DOES impact all of us. While it appears the order bans Federal taxation on this gift, many states are not so kind, and it will be treated as earned income to residents there. You’ll want to find out if it applies to you.

Update: This program is under judicial hold. Stay tuned.

Until Next Time,

All My Best,

Bonnie Burkett