By John Pritsiolas, Special to the Chronicle
Many individuals in America would look at the below chart and automatically associate it with deficit spending by the government. However, this couldn't be any farther from the case; this chart actually represents the sheer amount of student loans in this country. Alarmingly, the financial media always seems to be infatuated with the minutes from the latest FOMC meeting, the affairs in the Middle East, or the current price of oil. While this is to be expected on the part of many analysts and commentators, student loans are all but ignored on a daily basis.
But, somebody must address the giant elephant in the room sooner rather than later. The fact of the matter is, student loans can simply be classified as a "credit bubble." Considering the country as a whole is still recovering from the previous housing bubble, the popping of the current student loans bubble would be nothing short of devastating for universities, to say the very least. Before you dismiss this notion as impossible, consider two facts, the price of gasoline is most assuredly on its way to $5 a gallon and many students who have recently graduated remain unemployed to this day (unemployment rate for recent graduates stands at 9.1 percent). Essentially, this not only equates to a higher cost of living (across the country, not just in New York), but also hinders individuals from paying their student loans (among other financial issues as well). In a recent finding, the average student debt was roughly around $34,000, a debt burden that only increases with each coming year. This should not only be a major concern for universities or market participants, but also for the students and professors.
When the student loan credit bubble starts to deflate, universities will be forced to cut programs (axing the Hofstra football program certainly didn't resonate well with students) and they will also be forced to downsize the amount of faculty on hand. On a lighter note, there is still a viable solution and there are many measures that even Hofstra can utilize without hurting the students or laying off faculty members. One could call this, "Austerity for Universities," but I would like to stress that if these measures are implemented on campuses across the country, there would be much less economic pain to bear in the coming years. First and foremost, eliminating or reducing the amount of concerts and other non-essential speakers that visit campuses would certainly be a step in the right direction. These are events that can effectively be described as blatant money pits (that money would be better spent on additional faculty or even scholarships), and lastly there are numerous amounts of clubs across campuses that just receive too much funding.
While such preventative measures would not initially be greeted with much fanfare from students, I believe that every student should take a step back and perform a cost-benefit analysis of the situation. Ultimately, at the very end of the day, what should be our top priority is at stake here: our education.