The Federal Reserve Bank of New York’s recent data on college graduates has been a gift that keeps on giving. The plethora of information has provided great insight into the millennial generation’s current economic predicament.
In their most recent report, Jaison Abel and Richard Dietz of the New York Fed found that only 27 percent of college graduates have a job related to their major. Their report also confirms that much of America’s youth is underemployed: only 62 percent of graduates had a job that required a college degree in 2010. This comes as no surprise, since 58 percent of jobs created during the recovery have been in low-wage occupations.
Given that reality, and student loan debt that now exceeds $1 trillion and surpasses credit card and mortgage debt, many have begun to question the value of a college education. Graduates under 30 years old now carry an average of more than $21,000 in debt. College enrollment is already 2.3 percent lower than it was this time last year.
On July 1, this argument will be strengthened if Congress allows student loan interest rates to double from 3.4 percent to 6.8 percent. Sen. Elizabeth Warren has proposed a bill that would resolve this issue by allowing students to receive the same rock bottom interest rates as big banks, currently at 0.75 percent. (By contrast, House Republicans have passed a student loan bill that would actually raise rates above 4 percent. President Obama has vowed to veto the bill.)
The last thing struggling families and students need is another blow to their pockets. Millennials are less likely to buy a car or a home, becoming permanent renters. What we are burdening them with is weighing down the entire economy and hindering our recovery.
The employment situation has already scarred a generation and robbed them from a decade’s worth of wealth. Similar to the housing crisis, student loans may be the next bubble to burst. As tuition rises and unemployment remains high, students are right to feel they are being tricked into purchasing a “lemon.”
The predicament America’s youth has fallen into resembles the 1980’s song “Should I Stay or Should I Go Now.” Students must decide if they should be improvident for a degree that will land them a job as a barista and large monthly loan payments, or ride the economic wave until times are better and get a job that relates to their degree.
No one knows the correct answer. The only thing we know for certain is that the government needs policies that support students, create jobs and invest in our country.
As the song goes: “Should I stay or should I go now? If I go there will be trouble. An if I stay it will be double.”