From the WSJ: Congratulations to Class of 2014, Most Indebted Ever
As we wrote yeterday, although a college degree is an important factor for lifetime success, not everyone is suited for higher education. Misguided policy by well-intentioned individuals has encumbered millions of low-aptitude students with debt and little hope of graduating.
The problem developing is that earnings and debt aren’t moving in the same direction. From 2005 to 2012, average student loan debt has jumped 35%, adjusting for inflation, while the median salary has actually dropped by 2.2%. If that continues debt burdens could start to become more unwieldy.
A solution is for more students to major in higher paying STEM fields, to attend a prestigious college, for colleges to raise the SAT score threshold for admittance, and for counselors to give more realistic, pragmatic advice for high school students, such as encouraging to go to a trade school if they are not cut out for college. The problem is the conflict of interest because most non-elite colleges just want tuition, not necessarily the best students. The result is a lot of dull or unmotivated students are admitted, they rack up a lot of debt , and then drop out. Another solution we proposed is to replace costly diplomas with cheaper cognitive testing to screen qualified applicants.