Why Johnny Can't Pay His Student Loans

NEW YORK (TheStreet) -- Young people face a cruel irony. Most can't land a decent job without a college education, yet many graduates are locked into poorly paying positions that don't permit repayment of student loans.

For two generations, college price tags have risen much faster than inflation and families' ability to pay. More importantly, costs have leaped faster than what graduates can earn over working lifetimes, and many diplomas do not offer a positive return on investment, as measured by graduates' ability to service their debt.

Working professionals, including some lawyers, are moving in with older relatives --they simply can't pay both rent and student loans.

Many never get out of debt. About 17% of delinquent student loans are owed by folks over the age of 50, and Americans over 60 still owe $36 billion in unpaid loans. Too frequently, social security checks are garnished and debt collectors are harassing borrowers in their 80s.

Employers may be partially to blame. It was commonplace in the 1950s and 60s for jobs as diverse as copy editors and reporters at newspapers, retail store buyers and managers, insurance adjustors, and laboratory technicians to have only a high school education and some employer training.

Now, despite the fact that employers must often still train new hires, they require some college or even a diploma. Requiring some higher education may be an easy way of screening an applicant's native intelligence, but many jobs simply don't pay enough for students to repay six figure debts in a decade or so.

K-12 public education is partially to blame. During the late 1960s, a sense emerged that the performance of high schools had declined--judging from the reasoning, English and Math skills of college freshman, employers were probably right.