A Problem With No Solution?

One piece of advice that has always served me well is this: Bring a solution anytime you bring a problem or challenge.

But I must ignore that advice today.

Unfortunately, the interplay between a jobs market that is treating Millennials particularly harshly… the rising cost of a college education… the growing student loan bubble… and the perception (right or wrong) that college grads are more valuable and productive than the lesser educated… well, that’s a pretty big problem and easy solutions are elusive.

Here’s a chart (from the Georgetown Public Policy Institute) that shows the crux of the catch-22:

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College grads have gained more than two million jobs since the 2007 recession began.

Meanwhile, those with only an Associate’s degree lost two million jobs in 2008 and 2009. And those with a high school diploma or less have lost more than five million jobs.

Clearly, you need a Bachelor’s degree to get a job these days. And that’s where the problem begins, because college degrees are now extraordinarily expensive.

The cost of higher education is rising faster than inflation… faster than health care costs… faster than almost anything you can measure.

What’s more, the majority of 18-year-olds  don’t have tens of thousands of dollars saved up for tuition payments. Neither do their parents.

So the majority of college students take on debt to fund the self-investment. The growing dependence on student loans has led to a massive bubble, with total balances ballooning over $1 trillion.

As more college grads leave campuses with massive debt burdens, they inevitably delay buying a new car, buying a house, and starting a family. Lower spending from the indebted Millennials creates a drag on the economy, just when the demographic group is expected to enter the workforce, form households, and start to boost the economy.

But do they really have a choice?

While some enterprising young folks have found great pay without college degrees – particularly in fracking boom towns – the overwhelming sentiment is still the same: If you want a good-paying job, you’d better get a college degree (no matter how much it costs you).

Employers have a strong hand. They’re able to hire college grads, who are also desperate for work, at nearly any rate. So that degree is a must-have ticket to the job interview, even if the returnrn on that degree is buried deeply in the pile of debt required to get it.

Unfortunately, as I warnrned you, this is a problem for which I don’t have a great solution. As long as the perception exists that a degree equals a job, this puzzle will likely go unsolved.