Human Capital

I finished paying off my school loans in 1999. Like many paying on loans, I did not pay back just a bit more than I borrowed; it was close to double. I was almost a debt slave. Leaving grad school to find no professional employment opportunities put me behind the repayment eight ball from day one. It took several years before things turned around. But for about twenty years, the monthly payment was a heavy burden.

There was an incredible thrill when I mailed off that last payment. But also a worry that, once again, the unscrupulous would find some obscure fee or payment that would tie me to continued charges. I sometimes have a terrible dream in which I still owe a few dollars, and with interest, I would be paying for another decade.

The jury deliberating on the value of post-high school education has found that even a standard liberal arts education pays significant benefits over a lifetime. The trend is towards multiple careers during a working life, not staying forever in one occupation. Having an excellent traditional liberal arts background may better prepare us for the shifts, twists, and turns of changing employment. 

But education will probably continue to be our single most considerable personal expense. When it’s paid, it’s great to bask in the glow of achievement. But more and more are winding up with unpayable amounts. I wonder if the lenders are hatching a method to pass the bills onto the next generation. A sort of peonage based on educational debt. Considering the benefit to the entire society that education brings, it would seem that it would be worthwhile making paying for it less demanding. Massachusetts has started a system of free community college education. This program will lift the burden of two years of educational debt from many. Quite a few students may decide that two-year associate degree programs are all they need or want. Others will go on to finish a bachelor’s degree.

We invest all the time in things we need as a society: roads, buildings, harbor engineering projects, and more. We should be prepared to invest in the human capital that makes everything possible.