The findings from last week’s WSJ/NBC poll carry a dismal message: Americans are expressing record levels of anxiety about their future prospects. Although survey respondents faulted politicians in Washington for their malaise, a broader historical perspective shows that blame may be a bit unfair. The overall erosion of confidence, which began in late 1990, has been taking a steady toll since.
Back in 2008, 56 per cent of survey participants expected the next generation to struggle even harder than they themselves do. That number, however had climbed to 63 per cent by 2012, and now stands at a troubling 76 per cent.
One key response from the recent poll indicated that either the respondent or their own child now carries over $5000 in student loan debt. That burden, created by a runaway student debt crisis, is a significant factor in the rising pessimism. To start with, among the 20 million students who attend universities each year, 60 per cent must borrow to help cover the cost of their education.
The consequences are mountainous, as total student debt today has reached a staggering sum, somewhere between $902 billion and $1 trillion. To get your arms around those numbers, reckon that out of 37 million borrowers, in 2012 the average student loan balance was $24,301.
Those educated in the UK and in Europe can barely conceive how fortunate they are, considering the relatively lower costs of education, and the availability of government subsidies. In America, grants and scholarships have failed to keep pace with expenses, with the price of higher education up 130 per cent in the past 20 years. Suffice to say that in 2014/2015, the most expensive American college, Sarah Lawrence cost $49,680 for tuition, $9510 for a room, and over $4000 more for additional fees, food and insurance. (Multiply that by four years, for a standard undergraduate program.)
No wonder that young Americans are postponing major life commitments, like marriage, children, home ownership, embarking on a career of choice, or starting an entrepreneurial business. As congressman William Ford warned thirty years, ago, “we are producing a class of indentured servants who must work to free themselves of the bondage of educational debts.”
Vanessa Drucker is the American editor of Fund Strategy magazine