Student loan debt did not “improve” this year. It shrank because Americans slammed the brakes on borrowing. The total number of borrowers is down from its peak in 2012. However, the amounts kept climbing up. Imagine Rome claiming victory because fewer recruits are signing up for the legions. It is not a strength. It is fatigue. (Source: https://www.congress.gov/crs-product/IF10158)
Colleges are closing at a pace that feels less like natural attrition and more like a slow-motion bank run. Since 2022, we have lost twenty-seven schools, thirteen of them in 2024 alone, and over forty since 2020. The Philadelphia Fed says as many as eighty could vanish by 2026. Seventy percent of Americans believe higher education is headed in the wrong direction. That is not a warning sign; it is a verdict. (Source: https://www.bestcolleges.com/research/closed-colleges-list-statistics-major-closures/?utm_source=chatgpt.com)
Tuition doubled over forty years. Americans owe $ 1.84 trillion in student loan debt. The math is so broken that borrowers with excellent credit are strategically not paying because the system feels too overloaded to enforce consequences. Meanwhile, enrollment is collapsing as students simply stop enrolling. When a business model relies on 18-year-olds agreeing to take on mortgage-sized debt for single-digit returns, eventually someone will ask if there is a better deal down the street. (Source: https://www.congress.gov/crs-product/IF10158)
And here is where the divide becomes almost Victorian. Women earn degrees at far higher rates while men step back from the table entirely. In thirteen states, women make up 60% or more of enrollment. Meanwhile, the ROI math splits the majors like tectonic plates. Computer Science and Engineering generate north of 13% internal returns. Humanities and Education hover around 5-9%. That is not a moral judgment; it is a cash flow statement. College still works if you pick the fields that pay. It punishes you if you do not. (Source: https://www.forbes.com/sites/michaeltnietzel/2024/08/07/women-continue-to-outpace-men-in-college-enrollment-and-graduatio)
The top one percent glide past this chaos untouched. Their kids still go to elite schools where the credential is secondary to the network. The middle class, once the loyal customer of the American Degree Machine, is now looking at rising costs, shrinking enrollment, campus closures, and a demographic cliff that will drop the supply of eighteen-year-olds by 15%. If higher education were a stock, any prudent investor would ask for the risk disclosures twice.
This is the tension of our time. A system built for a different century, trying to survive in this one. Some pathways still yield real opportunity. Others are sentimental luxuries priced like beachfront property. And have I mentioned the employment changes caused by the implementation of AI?
Before your teen signs a lifetime loan for a degree with a five percent return, make them run the numbers.
Visit UnscrewYourKids.com and try the free DEOR Calculator today.