College debt is a dream killer

I want to help solve the problem, and need your help

I had dinner with a friend and colleague last night. We talked about what is top of mind for both of us—in my case, that includes college debt.

 My friend had aspirations of becoming a corporate law attorney. This was her dream and she did everything right to get there—except funding for “dream jobs” wasn’t readily available. My friend paid for her college education herself, and while she excelled in undergrad, the thought of taking on the expense of higher education was daunting. What she did instead, like so many other bright young people, was to follow an affordable and steady career path in financial services, where she is thriving—but it’s not the path that she truly wanted.

The point is—we’re killing dreams.

Recently, I read that the state of New York is going to start offering free public college tuition programs this fall. I was thrilled. I mean, if a college student is able to graduate with less than $35,000 in debt, he or she is lucky. But college is looking more and more like a bad investment; according to a new report, college debt has become a $1.3 trillion industry, with 42 million folks footing the bill.

I’m a dreamer. I think college debt is a dream killer.

We tell our kids to work hard in high school, apply to a good college, go on to grad school or medical school—go be a scientist, a doctor, a professor. We tell our kids that they can be whatever they want to be.

“I did everything I was supposed to do,” says Chad Downing, a 29-year-old doctor from California. Chad has a student loan balance of about $400,000. “I don’t like to think about the loans, I have selective amnesia, but once I’m done with my residency, I’ll be more than half a million in debt,” he laments.

Chad knows that he will be working for free for a decade, because the typical doctor doesn’t earn a full-time salary until 10 years after they graduate.

So when I read about New York’s free public college tuition program, I thought, “This is progress,” though reading through the fine print, I realized that this particular form of progress is limited.

New York’s plan has the caveat of the ‘Excelsior Scholarship’, which is a work and residency obligation that kicks in after students graduate. Scholarship recipients will have to live and work in New York State after graduation for the same number of years they received Excelsior Scholarships, or their grants will turn into loans.

In other words, if you study to become an engineer in New York and then get a gig in California, you had better think twice about moving. One of the big reasons that a college degree gives you so much earning power is because it allows you to compete in a national labor market.

“I’ve heard about the plan in New York, and I’m actually moving there to do my residency. I have to stay for five years and work for a publicly run hospital. I’ll be making about $60,000 a year,” Chad said. “At the end of the day this deal will pay for 50 percent of my loan, which is good, but if I miss one payment the deal is off and, honestly, that doesn’t make much of a dent.”

Chad’s story, like my friend’s, is all too familiar; according to the College Board, the average cost of tuition and fees for the 2016–2017 school year was $33,480 at private colleges and $9,650 for state residents at a public colleges.

Most financial aid can cover books and other expenses, but often a student can only work part-time, so in the end, according to the same source, a four-year college degree including housing, books, and food at a private college will run an undergrad around $200,000 to earn, while an undergrad degree from a state school will cost roughly $98,000. Housing, food, and other living expenses are not actually costs of attending college, since people must pay for these things whether or not they are in college. However, a very significant cost of going to college is forgone earnings from time devoted to school instead of to the labor market. Without adequate earnings, many students struggle to meet daily expenses.

How is that type of debt encouraging our brightest minds to continue their education?

Without the weight of student loan debt, more college graduates might buy houses rather than renting. They might buy cars, spend more on healthy food, and travel more. In essence, they could contribute more to the economy.

 “My daughter was accepted into the grad program of the Yale University of Art School, and she didn’t want to go because the $40,000 a year debt would crush her as a young artist,” said Carol Marvin of Salinas, CA.

“I told her to take out the loans and by the time she was done we would find a way as a family to pay the debt. I hope we do.”

That’s a big gamble for the entire family.

The more I read, the more I realize that New York isn’t offering free college—it isn’t even offering free tuition, and as Chad now understands, doing everything his teachers and parents told him to do to get ahead might not pay off.

“On paper, going to college to be a doctor is a horrible investment,” he said. “You have to be willing to climb into a hole and I think that’s dissuading a lot of intelligent people from going into medicine. If I knew back then that I would be this much in debt, I don’t know if I would have chosen to be a doctor.”

We need scientists, doctors, and professors. We need dreamers of all aspirations. Dreams have requirements. And therein lies the problem with the current status of a U.S. college education.

This is top of mind for me. I intend to make demonstrable progress in the next 24 months, but I’m not going to solve this on my own.

Let me know if you can help. I can be reached at

Shana Richardson

Shana Richardson

Shana Richardson began her career in financial technology with the Texas Credit Union League. Here, she managed the turnkey, pre-screen Auto Loan Recapture™ program, and later assumed broader responsibilities as ... Web: Details