Rupert Cornwell: Is this the bursting of the education bubble?

Out of America: As students prepare to graduate saddled with record levels of debt, the parallels with the sub-prime mortgage crisis are hard to ignore
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Tis the season of commencement, that peculiar American rite of spring which we in Britain refer to as the university graduation ceremony. Colleges compete to enlist important speakers to inspire the departing graduates. And the whole thing unfolds to the strains of "Land of Hope and Glory". Close your eyes, and it could be the Last Night of the Proms.

President Obama is doing commencement speeches this month, so are Mitt Romney, Oprah Winfrey, Pat Boone and Tony Blair. Occasionally, they make history – as in 1947 when George Marshall, the Secretary of State, used his commencement address at Harvard to announce the Marshall Plan. A few even enter legend (as when Steve Jobs told Stanford's class of 2005 to "Stay hungry, Stay foolish"). This time, however, those at whom these exhortations are directed may have something else on their minds: how to repay the money they borrowed to go to this place?

The problem of student debt is not new, and is not confined to the US. Never, though, has it been as acute as now. The combination of a weak economy, rising costs and cutbacks in education funding by the states, mean that going to university in America is more expensive than ever, while the number of decent-paying jobs for graduates is declining.

The actual fees vary hugely, from anywhere between $10,000 (£6,330) and $30,000 (£19,000) annually (including board and lodging) if you go to a public university in your own state – double that for out-of-state students – to $50,000 or more for some private colleges. Full whack at Harvard, for instance, is more than $60,000 (£38,000) for the 2012/2013 academic year.

True, a bewildering array of grants and scholarships can knock a chunk off the final bill. The bottom line, however, is that college tends to cost a good deal more here than in Britain, and has moved beyond the financial reach of many families. As a result, the number of undergraduates who borrow has soared from 45 per cent to 94 per cent in less than a decade, according to a recent New York Times study, while last year's graduates went on their way with an average debt of more than $23,000.

And student loans have to be repaid. The headline news is that total student debt, at more than $1tn, now exceeds total consumer debt. Then there are the horror stories, of people in their fifties and sixties pursued by collection agencies, even retirees who have part of their social security payments docked because of unpaid student debt dating back decades. Even if you declare bankruptcy, student debt remains. Which prompts a fundamental question: is university really worth it?

The answer, according to a host of studies, remains a resounding yes. College is part of the much-trampled but ever- resilient "American Dream". The road that climbs to the middle class is assumed to pass though the college campus, and the figures support this. Over his or her working life, a graduate, it has been calculated, will make $1m more than someone with a mere high school diploma – an annual salary differential of perhaps $25,000 (£15,800), and plainly more than enough to pay off outstanding student debt. Then there are life's unquantifiables, such as good health and a happy marriage. Every survey shows that college graduates fare better on these counts, too.

But that, of course, is if you have a job. Of Americans under 25, one in five are unemployed and as many more may be underemployed. Tales abound of super-qualified graduates working in restaurants to make ends meet. All of which has some economists wondering whether, after its calamitous property bubble, America is now saddled with an "education bubble".

Student loans carry low interest and are easy to obtain; college prospectuses tend to make them sound an afterthought to the joy of learning and the exciting prospects ahead, rarely dwelling on the inconvenient fact that these loans must be repaid.

It all sounds very like the sub-prime mortgage crisis. There are important differences – not least that most student loans are guaranteed by the government, meaning that a mass default would not bring down the banking system. But the similarities are troubling. And even the glorious Pomp and Circumstance March No 1, and the soaring platitudes of commencement speeches this month won't make them disappear.