The increasing student loan debt is a huge generational tax

It always amazes me when fired-up youth passionately argue in the classroom that welfare moms are the reason why we are in trouble.  I suspect that they arrived at that conclusion based on the phrase "welfare state" that is often talked about even on talk radio, and how households in poverty receive "welfare checks." So, in their haste, they think of the word "welfare" in both and equate them. End of story.

Correcting a misinformed opinion is awfully difficult.  How much ever I try, I know that the evidence and clarification rarely penetrates through.  Those are the occasions when I think that Sisyphus had an easier time.

Readers of this blog know better. A growth in demand for those welfare expenditures, particularly with Medicare and Social Security, thanks to the high life expectancy and the high costs of supporting life into the eighties and nineties of people's lives, means the state has less to allocate for other line items, assuming there will not be a huge increase in revenue.

Meanwhile, at the state level, we have also vastly decreased our tolerance on crimes, even if they are only for drug possession, which leaves less for other expenditures.

Does it really take a brain surgeon then to figure out that the math simply won't add up?

Here in Oregon, this report from 2009 said it all in a wonderful graphic:

You simply can't have it all, and higher education lost as states started spending more and more on criminal justice.

It doesn't surprise me at all, therefore, that Oregon is the third from the top with a 43.6 percent reduction in state spending per student in the last five years, from where the previous chart left off:

Source

The cost of higher education, via tuition and fees that students pay, has been on the rise not only because of decrease in state support at public institutions, but also because of the explosive growth in "student life bureaucracy" and spending on athletics.

Source

Which means, we would naturally expect students to pay much higher shares of the cost of higher education, than ever before.  How would they do that?  By taking on debt, of course:

Source

Notice on the chart on the right that there is one delinquency that has sharply risen, even while others have dropped--some more than others?

Moreover, the delinquency rate is expected to rise in the near future as more student loans move beyond their forbearance period, when no repayment is expected, to the time when borrowers must pay.  Many of those who borrowed no doubt envisioned that a college education would yield a better financial future for themselves.
Student loans are becoming difficult to pay back.  Why?  Because college grads are finding out way too late in the game that the jobs they do get, if they do manage to get them, do not pay well enough.  In most cases, the jobs don't even require a college credential.

But, here is the real problem: it is not only difficult to draw people's attention to these issues, but even more difficult to make them understand that there are tradeoffs involved in every decision--public and private.  If we want to put every drug user in prison for a few years, well, we will have only pennies to spend on higher education.  If we want Medicare to pay for the 82-year old grandpa's Viagra pills, we will have pennies to spend on the youth.  Spending three trillion dollars on wars mean that we won't have money for a lot of domestic needs.

At the end of it all, who gets screwed?  Not the senior citizens. Not the police officers.  Not the higher education faculty. Not the military. Not the politicians. ... The youth are paying big time for all our irresponsible decisions. But, youth being youth, their focus might not be in the metaphorical screw but in the literal one, and it will be a while before they will realize how much we have messed them up!