understanding politics, considerations

Interest, College Loans, and Diminishing Returns


April 2nd, 2007 · Business, Economics, and Finance, Europe, Science and Technology

interest college loansPart of the Amer­i­can Dream is the hope that chil­dren will do bet­ter than their par­ents. In the­ory, each gen­er­a­tion should be more suc­cess­ful than the one that pre­cedes it. But as the New York Times recently reported, this men­tal­ity is caus­ing increas­ing stress and anx­i­ety for the chil­dren of upper-class fam­i­lies who are fac­ing inter­est, col­lege loans, and high pay­ments themselves:

Esther and Colby are two of the amaz­ing girls at New­ton North High School here in this afflu­ent sub­urb just out­side Boston. “Amaz­ing girls” trans­la­tion: Girls by the dozen who are high achiev­ing, ambi­tious and con­fi­dent (if not immune to the usual ado­les­cent inse­cu­ri­ties and melt­downs). Girls who do every­thing: Var­sity sports. Stu­dent gov­ern­ment. The­ater. Com­mu­nity ser­vice. Girls who have grown up learn­ing they can do any­thing a boy can do, which is any­thing they want to do.

But being an amaz­ing girl often doesn’t feel like enough these days when you’re com­pet­ing with all the other amaz­ing girls around the coun­try who are apply­ing to the same elite col­leges that you have been encour­aged to aspire to prac­ti­cally all your life.

The stu­dents in this arti­cle (and every­one like them), in a sense, are vic­tims of the Law of Dimin­ish­ing Returns: the more suc­cess­ful you already are, the harder it becomes to be even more suc­cess­ful. And, in the United States, everyone wants to be more suc­cess­ful than they presently are.

If one grows up poor or in the lower middle-class (like I did), it is fairly easy to move into the mid­dle class if one has suf­fi­cient moti­va­tion: one stud­ies hard in high school, goes to col­lege, grad­u­ates, and obtains a white-collar job. Despite the increas­ing cost of higher edu­ca­tion, a bachelor’s degree can still be a Golden Ticket.

But if one grows up in an afflu­ent fam­ily, then one nat­u­rally wants to do even bet­ter. But the com­pe­ti­tion is much more severe: every­one is intel­li­gent, every­one has mon­e­tary resources at his dis­posal, every­one has access to qual­ity pri­mary and sec­ondary edu­ca­tion, and every­one wants to go to a first-tier uni­ver­sity and grad­u­ate school. Everyone’s expec­ta­tions are higher.

In this envi­ron­ment, it is increas­ingly hard to sep­a­rate one­self from the pack — and no one wants to look like a fail­ure by accept­ing the second-best. So every­one must main­tain a fren­zied pace like the girls in the Times arti­cle. These stu­dents have my sym­pa­thy, even though they are more well-off than the vast major­ity of high-schoolers in the United States. The pres­sure must be immense.

Still, there is another rea­son for the stress. Care­ful read­ers will real­ize that the Times focuses on female stu­dents; no males are inter­viewed. As the arti­cle notes, more women are going to col­lege, and fewer men are doing so. In what is an inter­est­ing twist on feminism, a less-qualified male now has a greater chance of being accepted to a top uni­ver­sity than a more-qualified female. Uni­ver­si­ties want to main­tain a demo­graphic bal­ance. So women must work that much harder.

I don’t know why fewer men are attend­ing tra­di­tional col­leges, but I have a few ideas: Most peo­ple who attend col­lege — espe­cially women — receive degrees in lib­eral arts. My alma mater, Boston Uni­ver­sity, now costs $48,800 per year, and stu­dents in gen­eral are tak­ing out more loans to com­pen­sate for fewer grants and scholarships.

To be frank, a degree in Eng­lish lit­er­a­ture or phi­los­o­phy is prob­a­bly not worth $200,000. Per­haps male stu­dents, who com­prise most of the peo­ple who study in the tech­ni­cal, mechan­i­cal and com­put­ing fields, realize this fact and are per­su­ing the lat­ter sub­jects instead. But women are still more likely to attend tra­di­tional uni­ver­si­ties and study lib­eral arts despite the cost. And the com­pe­ti­tion, as the Times arti­cle reveals, is fierce.

Over the com­ing years and decades, I fore­see sev­eral changes in higher education:

  • As the United States must increas­ingly com­pete in a flat, glob­al­ized world, our edu­ca­tional sys­tem will move from the “soft sci­ences” and towards sub­jects includ­ing busi­ness, engi­neer­ing, math­e­mat­ics, eco­nom­ics, finance and law.
  • Lib­eral arts will become less of a pri­or­ity — even though such sub­jects are impor­tant and nec­es­sary. (My under­grad­u­ate courses in polit­i­cal sci­ence, his­tory and inter­na­tional rela­tions, for exam­ple, helped me to under­stand the world. This in turn informs my deci­sions when I vote and advo­cate for spe­cific polit­i­cal actions.)
  • More and more Amer­i­cans will attend uni­ver­si­ties in other coun­tries because they are cheaper. Com­pe­ti­tion in all areas is becom­ing glob­al­ized, and higher edu­ca­tion is no excep­tion. Prices here should fall to pre­vent col­leges from los­ing their cus­tomers — er, students.

Else­where: Adam Reilly is dis­gusted by the New York Times arti­cle on New­ton North High School. Dan Kennedy dis­agrees and says it’s a look at the pres­sure the stu­dents are under. Uni­ver­sial Hub’s snark­i­ness and col­lec­tion of links are here.