The Left wakes up to their own self-imposed Nightmare
(Their empirical evidence supports what those of us with common sense knew all along)
Executive Summary
As tuition has risen over the last several decades in the U.S., student loan debt has ballooned. Despite growing debt loads, federal policy encourages the use of loans for financing higher education, based on the assumption that student debt supports increased postsecondary attainment—and, in turn, improved outcomes for individuals and our economy as a whole. This paper investigates the individual and societal effects of student loan debt by focusing on trends in student debt and labor market outcomes. Findings include:
• More education has not led to higher earnings over time.
Given rising student debt and postsecondary attainment, we would expect to see improvements in earnings. However, the distribution of earnings in the labor market has remained relatively unchanged over time. And to the extent that individuals see an income boost based on college attainment, it is only relative to falling wages for high school graduates.
• Student debt is a burden for a growing share of young adults.
Traditional metrics, such as median student debt over time and the median debt payment-to-income ratio, fail to consider the changing distribution of debtors or the changes in the ways that borrowers repay their loans. Once these factors are accounted for, the data show that many more Americans have debt, and the burden of that debt is more significant now than for previous generations.
• Credentialization better explains these dynamics than the “skills gap.”
Although the country’s populace is becoming more educated, each educational group is becoming less well paid. This is a result of declining worker power, which allows employers to demand a higher level of educational attainment for any given job, not a broken link between workforce skills and labor market demands.
• These trends have had particularly negative impacts on Black and brown Americans.
Credentialization is compounded for people of color, who already have to pursue more education than their peers for the same or similar positions. Given that people of color have less individual and community wealth, students of color take on a disproportionate amount of student debt, further contributing to disparities in debt by race and exacerbating economic disadvantages.
It is crucial to understand these dynamics of student debt, labor markets, and race, as well as how they interact and intersect, in order to inform better public policy that lifts students up, rather than maintain a system that holds them back.
http://rooseveltinstitute.org/student-debt-crisis-labor-market-credentialization-racial-inequality/