An American in Reykjavik: My Education on Education
Matt Eliason has just moved to Iceland from Chicago. In his regular column for Iceland Magazine he chronicles his first impressions of the country, its people and traditions. The subject today is student loans and fees.
Currently in the United States, a debate is raging in the public forum regarding the outlandish prices of attending college. Higher schooling has always been expensive in America, but exponential hikes in yearly expenses have pushed the general public near its tipping point. Helpless young adults are stigmatized into enrolling at an institute of higher education with no regard for their pocket books as they accumulate masses of student debt. Annual tuition fees have considerably increased at American colleges and universities over the past 10 years, leaving recent college graduates drowning in the loans that they accumulated while obtaining their college degree.
In addition to the financial implications of attending school, a college student is not guaranteed a job upon graduation. The tough entry-level job environment has left a large portion of the younger generation jobless and searching for answers. Some desperate attempts are currently taking place to help alleviate the inordinate amount of debt former students have to pay. For example, Senator, Elizabeth Warren has proposed the "Bank on Students Emergency Loan Refinancing Act" as a means to lower the interest rates students pay on top of their principle debt payment. However, this legislation will only cause a small dent in the larger problem of unreasonably high tuition costs! Assessing the opportunity cost of college prices in exchange for a college degree, there is a significant likelihood that for a majority of students, college is becoming a greater burden than a benefit.
Some staggering figures regarding student debt in the United States:
- America´s outstanding student loan debt is over $1.18 trillion, twice what it was in 2007.
- More than 40 million Americans hold student debt with 7 million of those former students defaulting on their loans.
- The average 25 year-old student debt amount has risen 91% in the last 10 years.
- The debt per person for the American student is currently over $23,000.
...you can understand my profound confusion and frustration towards the American university system when Icelanders first told me the cost of their yearly tuition… $600!
After summarizing the chaos around the American institutions of higher education, you can understand my profound confusion and frustration towards the American university system when Icelanders first told me the cost of their yearly tuition… $600! And the crazy thing is that they were complaining that costs for attending their universities had gotten too high! The local student population does not know how good they have at here in Iceland.
I have come to learn that low college tuition is the standard as well as the expectation for all of the Scandinavian countries, with a large portion of their universities costing absolutely nothing. Subsidized by the government, students must only worry about their room and board while attending the college of their choice. I asked my fellow Icelanders how it was possible that an essentially, free educational system could be entirely funded by the government. The sarcastic response was, ‘When you don´t have to fund a military that is already 20 times bigger than the rest of the world, you tend to have extra tax money for more important things, like education.’ Sarcasm and politics aside, I don´t think any patriot would argue with the logic of an inexpensive education.
The current educational climate in the United States shapes the big-picture financial decisions of the average American family. No parent wants to leave their child in a lifetime of debt; therefore, upon the birth of a family´s first child, college saving-accounts are opened in hopes that 20 years of steady saving will allow the parents to pay for their child´s schooling. After learning about Europe´s low cost of college, maybe American parents ought to start thinking about sending their children abroad for their higher education.
I will admit that the financial problems plaguing the United States educational system are far more complex than I have described in this short article. However, I believe that the United States government can do a much better job investing in America´s students rather than saddling them with debt. The most common loan default found in the United States is a student loan. Thus, the system needs stop taking advantageous of young adults in the form of post-graduate debt. After discovering the Scandinavian model of higher schooling, Americans need to take the time to be educated on education.
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