$1.5 trillion dollars. This is the amount of student loans that have accumulated from over 44 million students in 2019 alone (Forbes, February 2019). It is also noteworthy to point out that California remains the state with the highest amount of student debt, totaling $111.7 billion.
This is no surprise as California supplies some of the most renowned and popular, public Universities. In the fact sheet provided by the University of California website, it was confirmed that the entire University of California (UC) Schools received nearly 217,650 applicants for the 2019 fall admission (January, 2019). With so many applicants applying to the UC Schools, it is safe to say that the market for students in California is a bit saturated (we have not even discussed the applicants for the California State Universities).
Just based on the sheer number of students applying to schools in California, it would seem that this is beneficial to the state. However, mainly the UC schools are reaping the benefits. With record-breaking applicants from year to year (see graphic below), UC schools have made a name for themselves in the public eye. Furthermore, they have less to worry about under-enrollment as they have a constant stream of individuals willing to commit.
Although this may look good on the schools, it may negatively impact the jobs market in California. Why? Well, it all start when students submit their applications for the schools in the UC’s. Say for example, all the UC’s had a threshold for the amount of applicants accepted into each school. For the sake of argument each UC will only accept 20,000 applicants. That’s not even close enough to the applicants who applied in 2019. The only way for the Universities to remedy this problem is to either accept more people or to continue rejecting others for the sake of not over saturating their campus.
If the UC’s were to continue to accept more people, here is where the problem with student debt comes into play. By accepting more people, the UC campuses will have to expand physically (parking structure, dorm rooms, classrooms, etc.) in order to accommodate to the increased amount of accepted candidates. In order to obtain the money for the expansion projects, the campus’s will also need to increase tuition, meaning out-of-state students will have to pay even more. This is where debt starts to accumulate. Students’ loans will increase and by the time they graduate, their debt will be that much higher. To make that problem worse, jobs in California are becoming increasingly harder to find with the amount of competition coming from recent graduates. Employers are unwilling to higher inexperienced individuals. For example, in a 2017 article written by Liz Ryan on Forbes, she wrote a letter to her former self talking about the struggles of finding a job. She even states how the only experiences she has had was from on-campus activities. “How will I gain experience if no one will give me a chance?”
To further add on to that quote, how I pay off my debts or even make a living if no one hires me? There is physically and financially no way of doing so. Working part-time jobs while going to graduate school may be an option, but part-time jobs only pay so much and graduate school will only increase the debt.
If the UC’s were to continue to reject candidates, despite the increasing numbers of applicants, then it would only tarnish their reputation. Taking from the example above, if UC’s were to only accept a maximum of 20,000 students per academic year, the rest of the 217,650 applicants would have to find another school. Of course, this is unlikely to happen judging from the recent trends of the UC’s acceptance offers.
Therefore, the question at hand is: are employers responsible for the exponential amount of student debt? If employers were to take a handful of undergraduate students (with no experience) and train them so they have the necessary tools and experiences when it comes time for them to graduate, would that reduce debt? Some might say that there aren’t enough companies and employers that can match the amount of students coming out of the Universities in California. Although that may be true, a lot of companies nowadays also accept remote work (Owllabs, 2019). Owllabs have also stated that giving the option of remote work would make employees happier and allows them to manage their time more effectively (2019). Remote work also abolishes the idea of not having enough office space or opportunities for employers. Ultimately, this can also lead to a shift in jobs from California to other parts of the United States. No longer will graduates of California Universities struggle to find a physical job in California, but they can work remote for other parts of the country.
Remote work is just one alternative to keep employment up while simultaneously keep student debt down. Once students are able to secure a job post-graduation, their debts can start to be paid off immediately. Instead of having to look on an average of 7.4 months for a job (Consumer Affairs, 2018). So, whether you’re a student reading this or an employer, do you believe that student debt is becoming a norm and what are some ways we as people can help reduce that debt.
Sources:
https://www.forbes.com/sites/zackfriedman/2019/02/25/student-loan-debt-statistics-2019/#75b1de7d133f
https://www.chamberofcommerce.org/student-loan-statistics/
https://www.flexjobs.com/blog/post/remote-work-statistics/
