Perhaps another way to look at the current student loan crisis would be to recall the “housing crises” a little over a decade ago, in that the similarities to someone attempting to get a loan to buy a house, and not having the income or financial resources to make the monthly payments would obviously result in default, and eventually into foreclosure.

That expensive lesson learned brought us back to where banks once again used tried and true banking principles by first reviewing an individual’s financial background and their ability to pay off the loan. The lender after reviewing the applicant’s credentials decides if the purchaser is a safety risk.

The same basic common sense criteria should also apply to a young individual seeking a student loan for college. Obviously not with a financial background check, but rather if the major chosen by the student is a safety risk, in that recent data overwhelmingly shows that certain majors are simply bad loan investments.

According to the Federal Reserve Bank of New York, in 2016 alone, the Department of Education loaned almost $26 billion dollars to students choosing degrees under the wide umbrella of “Liberal Arts and Humanities, as their major, which statically have the highest rates of default compared to business, vocational and STEM majors.

To complicate matters further the Department of Education which grants Federal Student Aid loans, doesn’t take the time to consider the area of study the student is perusing, it simply divvies out the money without any thought whether the student will be able to pay the debt once he or she is in the job market.

In a recent 2016 report authored by Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce wrote, “What you make depends on what you take. A major in social work pays $30,000 a year compared to $120,000 a year for a major in petroleum engineering.” Business, vocational, and STEM majors all have significantly better chances of paying off their loans, The DCNF’s analysis of federal data shows.

In addition to lower pay, many liberal arts and humanities majors enter a job market with less opportunity, leading to high rates of unemployment and underemployment, according to government sources.

Estimates are that about 30% of student borrowers will ultimately default on their loans, according to a Brookings Institution survey, even though the federal government offers struggling borrowers nearly a dozen loan repayment plans.

The survey also found students who majored in the liberal arts and humanities are more likely than any other field to default on their student loans by age 33.

Perhaps to better understand the cost and effect of a liberal arts education along with the monitory investment involved, here’s an example of the 2019 data by the Department of labor highlighting certain liberal arts and humanities degrees, currently within the marketplace.

Individuals who major in “Environmental Studies,” their rate of underemployment is nearly 50% with an average median wage mid-career of about $65K annually. Individuals who major in “Ethnic Studies” their underemployment rate is 50.1% with an average median wage mid-career of about $57K annually.

According to the Wall Street Journal high school graduates enrolling in higher education increased from 2017 to 2018, an astounding 69% of all high school graduates enrolled in some type of higher education, that rate is about a 2% increase from 2017.

The dilemma for academically average youngsters graduating high school is that many are still enrolling and majoring in liberal arts and humanities courses, despite the dismal financial rate of return, in comparison to a booming job market of over 7.3 million job openings in February, that can offer for some of those youngsters an opportunity to jump-start a career within companies that offer apprenticeships and in many instances on the job training which can actually give that individual a better long-term financial outcome, free of student dept.

A college education may not be for everyone. Mike Rowe the TV host of the popular show “Dirty Jobs” has several foundations helping young people find skilled blue collar jobs that pay comparable to those individuals with college degrees, in that there’s currently a “skilled labor” shortage in America. Rowe also has a “Work Ethic Scholarship Program.” Each year the scholarship awards money to those individuals seeking to get into a skilled labor environment.

4 thoughts on “Student Loan Crisis: Liberal Arts & Humanities, Students More likely to Default”
  1. I am really impressed with your writing sjills as well
    as with the layout on your weblog. Is this a paid
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    to see a great blog like this one today.

  2. Dear Sirs,
    I beg to differ about your “Student Loan Crisis” article. I was an art and design major in college. I graduated deeply in debt. It took me 15 years of hard work, but I paid back all of my student loans. It’s not about the college major. It’s about the student and how he or she was raised.
    C. Celmer

  3. Romney and McCain gave the presidency to Obama. They were both involved in the Obama’s New World Order.
    UN and Muslim Brotherhood should be kicked out of Our Country and no more money.
    Like to hear Sarah Palens

  4. My daughter wasn’t eligible for a grant. She worked full time and went to school until she got her masters. She owes 50,000 and the money is taking out of her paycheck. In CA if she gets a student who doesn’t behave in class the student is not suspended or expelled, sent back to her class, no help. Funds for Law Enforcement on campus has been pulled as well as councilors for the kids.
    I know one family who are into drugs. She got a grant in Nevada, never went to school. Another one in CA, not going to school and she can spend the money on anything. They are on Welfare.

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