Debt buries American dream
America has long prided itself on being a land of opportunity. The American dream, stories of those rising from rags to riches, is etched into our sense of identity. But increasingly, this seems just a myth.
New data released by the Federal Reserve and the Department of Education last month explain why, in the midst of this recession, student debts are becoming an increasing source of concern. The Fed report shows that growing student debt is weighing down more and more Americans, even as credit card debt is falling. Americans have — partially — learned their lesson from abusive credit card practices and pulled back.
While student debt is rising, parents’ ability to pay without resorting to debt is declining. Fed data show that the income of the typical American family, adjusted for inflation, declined from 2007 to 2010. Their wealth was down almost 40 percent — back to levels not seen since the early 1990s. Separate data show that household income is back to levels of a decade and a half ago.
Meanwhile, the Education Department released data showing that during the period 2008-10, tuition at four-year public universities was up 15 percent and in some states, such as Georgia, California and Arizona, up more than 40 percent. This is not a surprise: With states responding to slow growth in tax revenues by cutting back on support for higher education, universities had no choice.