The average student graduates with $23,000 in debt. “That’s a lot of debt for a 22-year-old,” says Michael Ellsberg – and when you combine it with astronomical rates of unemployment rates, you have a crisis on your hands.
Michael Ellsberg: I live in New York and there's this Occupy Wall Street activity happening. I actually haven't been down there yet but I've been following it a fair amount and one of the main things they're talking about is student debt and you see these photos of people who say, I'm $100,000 in debt and I don't have a job.
This is a really big issue right now. The average student graduates with $23,000 in debt. That's a lot of debt for a 22 year old, and if you combine that with not having a job that leads to a toxic situation. Student loan debt is the only form of debt that is not dischargeable in bankruptcy, which means that it is a very dangerous and risky kind of debt.
It's frightening that we encourage young people, often when they're not even legal adults yet. They can't legally vote, they can't join the military, they can't legally buy a pack of cigarettes or beer, they can't do any of that stuff... but it's fine if they want to sign their name off to a $100,000 in student debt, which they will not be able to get out of when they graduate if they can't pay it.
So what you're finding now is a lot of young people who are in a significant amount of debt, $23,000, 50,000, 100,000, and who are depending on being able to get a good job to be able to pay that debt off. Instead what they've found is a job at Starbucks if they're lucky - that's even hard to get these days. There's lines outside the Starbucks whenever they have a career fair. They're making seven dollars an hour, ten dollars an hour, fifteen, twenty dollars an hour; they've got to pay off $100,000 in debt. And a lot of these young people are defaulting.
Quite frankly, the salesmen of higher education are not warning their customers - their marks if you will- about this risk. All they say is, here's this rosy picture you get if you get our BA degree, our law degree, our MBA - here's all the wonderful things that are likely to happen to you. They don't talk about the other side: and here's the risk that you might be in the hole for $100 grand that you can't pay off because you don't have a job and the compound interest is spiralling upward.
To not talk about those risks borders on fraud, and it is certainly unethical that these people are selling this form of higher education and not talking about these very, very significant and serious risks.
Directed / Produced by
Jonathan Fowler & Elizabeth Rodd