by William J. Bennett, CNN Contributor
Editor's note: William J. Bennett, a CNN contributor, is the author of "The Book of Man: Readings on the Path to Manhood." He was U.S. secretary of education from 1985 to 1988 and director of the Office of National Drug Control Policy under President George H.W. Bush.
(CNN) - A college degree was once synonymous with academic excellence and workforce readiness. Today, it seems synonymous with debt and underemployment.
Last week, the Federal Reserve Bank of New York reported that student loan debt increased to $956 billion, more than auto loan debt or credit card debt. More worrisome, the student loan 90-day delinquency rate increased to 11% this past quarter and for the first time exceeds the "serious delinquency" rate for credit card debt.
Student loan debt is reaching bubble-bursting levels. By comparison, in October 2007, the start of the subprime mortgage crisis, 16% of subprime mortgages were 90 days delinquent, according to Federal Reserve Chairman Ben Bernanke. By January 2008 it accelerated to 21%. If the economy heads off the fast-approaching fiscal cliff and tax rates spike for lower- and middle-class Americans, it may accelerate student loan defaults to crisis levels. The big banks got their taxpayer bailout; taxpayers may soon be on the hook for another.
With the rapidly rising cost of living and stagnant salaries,(if you are lucky enough to be employed) you have to have your priorities straight. I haven't been able to pay my student loan for almost three years now because I have to choose between that, or having food, utilities and vehicle repairs so I can GET to work. Yes, I signed the contract. Yes it's MY responsibility, but when you come right down to it, my families basic needs come first.
Yes, to a college degree! There is a value in obtaining a college degree. Students need to make informed decisions on college selections and costs. Financial literacy programs need to be expanded to include educating both high school and college students on the long-term advantages and disadvantages of private and government student loans.
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