Kohle Nixon, Ohio University '09, B.A., specialized studies. currently in $67,000 of school debt.
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Two years ago, president Obama challenged Americans to increase the number of college graduates from 40% of young working adults (ages 25 to 34) to 60% by 2020, which would be the highest proportion in the world. The goal is to help the U.S. compete globally. The problem is that the country doesn't have jobs for all its recent college grads--many of whom are now back home living with Mom and Dad--let alone the additional 5.5 million bachelor's-degree holders that Obama's plan calls for. There's also the problem of what those graduates studied. The U.S. isn't producing enough science and math majors, so high-paying positions in related fields are going either unfilled or to foreign applicants. A liberal-arts education, the pride of the American undergraduate system, increasingly looks like a road to financial distress.
Although the U.S. Bureau of Labor Statistics doesn't parse its data by graduating class, it does show that the unemployment rate for 16-to-24-year-olds with a B.A. or higher who are no longer enrolled in school was a whopping 13.2% in July--the highest to date for this cohort and almost double the rate from five years ago, before the Great Recession hit.
A faster growing economy could absorb more of those graduates, but the fear is that too many students are spending too much on degrees that may never generate the expected return on investment. A Harvard diploma is still going to open doors. But what about a degree from a less well endowed school, like Bates or Sarah Lawrence, that doesn't offer the generous grants the elite ones do? "These colleges are expensive," Kantrowitz says, "and that's where you hear kids going $100,000 in debt to graduate with religious-studies or theater majors."
Some students' debt burdens are so big, you wonder what bank would approve the loans or what parent would be willing to cosign them. Lyndsey P. (who did not want Time to include her full name) amassed an astounding $169,934 in debt while studying documentary filmmaking at New York University. Like many teenagers, she was so excited about getting into a top-tier school that the cost didn't keep her from enrolling. "You can't imagine the emotional darkness that descended when I started to understand the full extent of the debt situation I was going to be in," says Lyndsey, who graduated from NYU with honors in 2007.
To keep up with her $1,269 monthly payments, she spent the past two years working 9 a.m. to 5 p.m. as a lab technician and then rushing home to do phone support for a software company from 7 p.m. to 10:30 p.m. She got so burned out from the long hours that she quit the lab job this fall and doesn't know how she's going to fulfill the loan terms, which require her over the next 26 years to pay a total of $350,000, including accrued interest. "It feels absolutely hopeless. I don't know what I will do in the future if I want to get married or have kids," she says. "It's a huge burden to bring to a relationship. I am basically coming with a house on my back that we can't live in."