The Next Bubble Is About to Burst

    College Grads Face Dwindling Jobs and Mounting
    Loans

By Sarah Jaffe
AlterNet
June 1,2011

http://www.alternet.org/economy/151149/the_next_bubble_is_about_to_burst%3A_college_grads_face_dwindling_jobs_and_mounting_loans_/

It's the beginning of summer: warmer weather, longer
days, the end of the school year. And that means
graduation for thousands of young people across the
U.S.; graduation with more student debt than ever
before, and into a job market that is anything but
promising.

Young people between the ages of 16 and 24 face an
unemployment rate nearly twice that of the rest of the
population, according to data from the Economic Policy
Institute. 2010's 18.4 percent rate for youth was the
worst in the 60 years that economists have collected
such data. ColorLines notes that in 2010, 8.4 percent
of white college graduates were unemployed, 13.8
percent of Latino graduates, and a dismal 19 percent of
black graduates.

Those bright, shiny new degrees simply aren't worth the
paper they're printed on all too often. The cost of a
college degree is up some 3,400 percent since 1972, but
as we all know too well, household incomes haven't
increased by anything close to that number -- not for
the bottom 99 percent of us, anyway.

Pell Grants for students have shrunk drastically in
relation to the ballooning cost of a four-year college,
and Paul Ryan wants to cut them even more, pushing some
1.4 million students into loans, more of which come
each year from private lenders with little to no
accountability.

New legislation, introduced last week in the House and
Senate, would attempt to put a bit of control on those
private lenders, restoring the bankruptcy rules so that
private student loans may be discharged through
bankruptcy. Currently, private as well as government-
issued and guaranteed loans will stick with you even
through bankruptcy proceedings, saddling far too many
graduates with debt for life.

Still, bankruptcy reform is hardly a solution to the
problems at hand. Imagine 18 percent of college
graduates declaring bankruptcy when they can't find a
job, upon graduation, that allows them to make payments
on their loans?

Small wonder that many are calling the student loan
crisis a bubble possibly worse than the credit card or
housing bubbles. Small wonder that when polled by the
Pew Research Center and the Chronicle of Higher
Education, 57 percent of Americans said higher
education doesn't provide a good value, and 75 percent
said it is too expensive for most to afford. Yet the
lucky graduates who do have jobs still make, on
average, $20,000 a year more than those without
degrees. It seems that higher education, as with so
much else in this society, is turning into a way to
keep those who already have money making more of it.

In other words, all of Obama's declarations that we
will "win the future" through education, notes Kai
Wright and Stokely Baksh at ColorLines, mean little if
there are no jobs for those graduates even with their
sparkling credentials.

Even David Brooks at the New York Times this week has
some sympathy for the latest crop of recession
graduates, noting that their education hasn't prepared
them for the world they face. "No one would design a
system of extreme supervision to prepare people for a
decade of extreme openness," he says, but then of
course goes on to blame "baby boomer theology" for the
struggle of today's youth.

Paul Mason at the BBC calls them "the graduates with no
future," and he's been following the role they've
played in protests not only in Britain but across the
Arab world, particularly in the revolutions in Egypt
and Tunisia.

After all, what's left for an educated generation,
brought up on social networking tools, to do but apply
those tools to organizing protests? We haven't seen a
student movement in the U.S. like the one in England
yet, but we've seen the role of students in Wisconsin,
Ohio, New Jersey and California.

Brooks would have us believe that "expressive
individualism" is the problem with this downwardly
mobile generation, but those same students he decries
for their selfishness are busy using their skills to
fight even more selfish governments, bent on cutting
services for students, the poor and the elderly to give
more money to those most selfish of all entities:
corporations. Individualism is hardly the problem with
the students -- it is, instead, the problem with the
societies.

One thing is sure: a rising tide of unemployed, debt-
ridden youth is not simply going to go away without
action. If the federal and state governments don't do
something soon, the "graduates with no future" may well
bring the unrest here.
___________________

Sarah Jaffe is a freelance writer.

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