In 1960, I went to U of Illinois- mostly because the cost was much less than other options. Little did I know at age 17 that it was, and still is, a world class institution of higher learning. As a resident, tuition was about $100 per semester. Like most of todays students, I worked in research lab, sold pots and pans door to door, bartended and was fortunate to have a very good summer job (Internships didn’t exist then). And my parents covered a portion of costs.
I graduated with zero debt and a surplus.
Sound familiar today? Probably not.
Many years later, I discovered something I didn’t know. In my time, student tuition represented 5% of the cost of my education while 95% came from the State of Illinois (ie: taxpayers). Years later, early in this century, I learned that student’s tuition constituted 55% of the cost– 11 times what I paid. Had my tuition been that high, I probably would have dropped out.
The problem started a long time ago, in the 80s and has compounded since. In the 80’s we had a vicious conservative movement. State governments were ‘broke’ while the federal government deficit spending was massive; and businesses were flush. My step son was in Newport Beach high school, one of the wealthiest communities in the state; and I was able to witness the squeeze: no showers, bring your own towel, reduced phys-ed, fees for extra curricular activities, etc. The conscious effort of the conservative movement to cut spending affected everything… except Wall street.
A few years later, I was taking an enrichment class at my local Junior College. The Prof, apologized for not having sufficient supplies, softly begging for support or understanding.
Years later during my ‘political years’ I had the pleasure of having a one-one conversation with Senator Claiborne Pell as in Pell Grants. He was a ‘talker’ and seemed like a nice guy; however, he impressed me as having no ‘left brain’ and all ‘right brain’— someone that Wall Street would love. I was then in the investment world and the concept of a bankruptcy proof student loan for wall street with relatively high interest rates indicated to me that he had ‘slept with the devil’ in spades. Now, we have to ask if there is a solution.
About the same time, I was part of a group that was starting a Savings & Loan company in the midst of the havoc. The new rules were such that you could obtain a charter with about $250,000 equity plus borrowed funds of $750,000. Naturally, hundreds of promoters jumped in. Then, the Savings and Loan crisis erupted.
The government was on the hook for about $500 billion (In todays world, it might be like $5 to 10 Trillion). “Dooms day,” “It can’t be fixed.” Presidential candidate Gov. Mario Cuomo, father of now governor Andrew Cuomo, was one of the few optimists saying something like “we can fix this…it’s a big deal, but we can do it.”
So, relating to the S&L crisis of the 80s and being reminded of Mario Cuomo who I had the pleasure of meeting, I will make a few points.
- We have student loans outstanding in the range of 1.3 Trillion (looks small compared to the S&L crisis)
- In the last 12 months, we found an additional two to three trillion to partially fund the COVID crisis. (The student loans start to look like a hicup)
And to my student friends: You deserve good in all areas of your life. You deserve to be emancipated from this sickness.