When looking at investments, the smartest thing to do is to weigh the cost and the potential reward.
Every year students are working hard through high school in hopes of getting into a good college to further their educational goals and prepare themselves for the workforce.
If students are smart they can get scholarships to pay for college. If they are lucky, their families have stockpiled money for them to attend college, or perhaps they have a combination of the two.
Most college students start out with no financial debt and no real know-how of balancing a checkbook, planning their financial future, and no investments other than their potential investment in their education.
New Yorkers in recent years have seen a steady increase in tuition for State Universities (SUNY) or City Universities (CUNY). The $100 increases may not feel like an immediate punch to the wallet but over time those increases have mounted, severely impacting students.
Why is New York State using our students to settle debts made by its lawmakers? In recent years the tuition hikes have gone straight into the state’s general fund — not a penny benefited the educational institutions.
The state needs to start seeing college students as more than a revenue source if they truly believe they are “our future.”
Many other countries see the value in providing a free college education to their citizens as a security deposit for a profitable future. European countries like Sweden offer a free college education to citizens. Though student loans are also taken out to provide food and housing while students attend college, Sweden’s college graduates are leaving with a degree and 60 percent less college debt than students in America.
Tying the financial burden left by financially established adults to newly self reliant young adults is unethical. Mortgage loan debt can be forgiven when someone declares bankruptcy. Student loan debt will never be forgiven and interest rates are allowed to jump any which way the lender wants.
If our educated young adults must make a choice between securing a job in their field or taking a hit and starting in an entry-level position which pays more, many will be forced to leave their chosen field to pay off the debt.
Carrying this debt results in future impacts to the state’s economy. Not only might graduates leave their field, they could leave the state to find cheaper cost of living elsewhere. This abandonment will be one less New Yorker paying taxes, buying a home and or sending their children to New York schools.
If this is a graduate’s first loan, when a minimum payment comes through on the bill the first thing an untrained person will see is the minimum allowable payment. The minimum payment could be $50 or it could be hundreds. Either might feel more manageable for the student. Unfortunately, paying just the minimum debt does little to lower the principle. It could be 10 or even 20 years before the student is debt free.
And, the option of deferring students loans can only be accessible for so long.
Most college graduates go into fields still as entry level workers with minimum paychecks living in modest homes if not back in with their parents to pay back the student loans.
The question needs to be raised why is New York strapping people who are just starting out with debts that most simply cannot afford to pay back — at least in the foreseeable future.
In 2011, The New York State Legislature passed legislation which authorized the SUNY Board of Trustees to raise tuition for SUNY and CUNY campuses every year for the next five years.
SUNY schools will raise tuition $300 per year for in-state students through the 2015-2016 academic year, $940 per year for out-of-state students at SUNY colleges and $1,340 per year for out-of-state students at the SUNY University Centers located in Binghamton, Stony Brook, Buffalo and Albany.
Earlier in the summer Republican senators shot down bills before the Senate that would have stabilized and regulated interest rates for student loans and set a precedent in investing in the future of students in New York.
An analysis by the State Budget Office estimated that interest rates for students will rise nearly 3 percent this year alone. The cost of a college education is simply becoming too overwhelming in this state and a majority of the country.
Is the alternative to simply not attend college and enter the workforce debt free?
It is a question today’s high school graduate really needs to ask themselves. In the meantime, state lawmakers need to do a whole lot more when it comes to investing in higher education, because these individuals truly are our future.