That’s what some educators would have you believe. Meet¬†Jesse Yeh, a student at the University of California, Berkeley. He voluntarily suffers the indignities of using library books instead of purchasing text books; he seeks out free food at campus events and skips meals (gasp!); and he loads up on courses, taking 21 credit-hours in one semester, presumably to get the most out of every tuition dollar spent. And he won’t take out a student loan–because he doesn’t need to.

Yeh is ahead of his time. He sees how debt has robbed graduates of economic prosperity. From the Associated Press:

“I see a lot of my friends who took out student loans, then they graduated and because of the economy right now they still couldn’t find a job,” said the third-year student [Yeh], whose parents both lost their jobs in 2009 and who grew up in the boom-and-bust town of Victorville, Calif., on a block with several houses in foreclosure. “The debt burden is really heavy on them.”

Students like Yeh worry educators. They fear that if students don’t take out loans, they can’t raise tuition. And if they can’t raise tuition, they can’t raise their own salaries. Or provide luxurious campuses that resemble country clubs. But educators don’t say that. Instead, they frame their fears as worry for students. They’re worried that students won’t graduate unless they live the student-loan-funded easy life. They’ll “trade down” and go to cheaper, less-prestigious schools. The horrors!


Education has become a business. And while schools like UC Berkeley don’t have shareholders, they do have administrators who make bank. And the more tuition dollars the schools pull in, the greater the bank. When those tuition dollars flee, so do the fat six-figure salaries. Educators have a reason to be worried, but it’s not for students’ well beings. It’s the money:

New borrowing nearly flattened out last year, according to the College Board, and actually declined on a per-student basis after accounting for inflation. Private borrowing (generally more dangerous to students) has dropped from about $24 billion in 2007-2008 to about $8 billion last year. A major factor is likely increased federal grant aid. But another may be students making more sacrifices to avoid loans.

That’s a pretty key figure: a decline in private borrowing by $16 billion. Federal grant aid has been increased slightly, but it hasn’t been increased by that amount. To my surprise, students have started to realize that taking out student loans to attend the gold-encrusted ivory tower of their choice isn’t always the best idea. I think we’re starting to see the wave of the future. And Yeh is the first to ride that wave.

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