Could Student Loan Forgiveness Portend the End of Catholic Colleges?

The government-backed student loan program has led to a bubble in college costs, and may spell the end for faithful Catholic schools.

President Biden’s announcement last week that billions of dollars of student loans would be “forgiven” led to much rejoicing among young people saddled with crushing debt. Of course, those who must foot the bill—everyone else, including those who worked through college or never went to college—were less enthused by the plan.

Biden’s decree ignores the underlying issues that caused the problem in the first place, and signals a move toward more government relief of college costs. Not only will this simply make the situation worse, it might very well lead to the end of Catholic colleges as we know them.

To be sure, the cost of higher education is ridiculously high. A generation ago, a young person could attend a private school and keep his four-year costs under $60,000. Now, the same education likely will cost north of $200,000. General inflation contributes somewhat to that exponential increase, but for decades college costs have far outstripped inflation. These increasing costs have fueled the desire of the federal government to offer low-interest student loans.

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The problem, however, is that these government-backed loans have caused the massive cost increase in the first place. Many years ago, our benighted leaders decided that everyone should go to college, or at least most young people should. Instead of a choice for a small segment of the population with specialized careers, college became an extension of high school—it’s just what you did after 12th grade: you went to “13th grade.”

In order for that to happen, the government made loans available to people who otherwise wouldn’t qualify for one. Imagine an 18-year-old young man, fresh out of high school, at the local bank asking for a mortgage. “What’s your income, young man?” “I have none.” “How’s your credit?” “I have none.” “What can you offer as a down payment?” “Nothing.” “Do you have a well-paying job?” “Nope.”

I think it’s clear that this young man would have little chance to obtain that mortgage. And a mortgage is a loan backed by collateral. Imagine that he wants a loan to start up a new business in which he has no experience. He wouldn’t even make it through the door of the loan officer’s office.

Yet with the government guaranteeing student loans, financial institutions were happy to hand them out like candy at Halloween to the exact young man described and millions of others like him. While it seemed like a treat at the time, it ended up being a trick: these loans ballooned the cost of college, making even larger loans necessary, until now we have young people taking out six-digit loans for degrees that will garner them significantly sub-six-digit incomes.

How did these government-backed loans raise the cost of college? It’s the same inflationary story you find anywhere: when money is flooded into a market, higher prices follow. If colleges are competing for 10% of high school graduates who can afford an average of $10,000/year for higher education, then they will have to fight to keep costs down. But if the market artificially expands to 80% of high school graduates who can now spend an average of $30,000/year on school, then colleges won’t focus on keeping costs down. They will concentrate instead on expanding services (better gymnasiums, more food choices, etc.) without regard to costs in order to compete with other schools for market share. They will also not worry about bloated administration costs. After all, the kids can afford it, right?

This is the broken system in which we find ourselves, and it’s the broken system in which Catholic colleges must compete. And we see what has happened: the cost of Catholic higher education has risen in lockstep with the general costs of college. It’s now common for a year of school at a Catholic university to run over $50,000, including room and board. That’s $200,000+ for a piece of paper and a few letters added to your name (often “B.S.” appropriately). 

Is it worth it? Even most Catholic universities are woke, brain-washing institutions that aren’t worth attending even if one were paid to do so, much less paying hundreds of thousands of dollars to attend. But what about those considered faithful Catholic colleges—the “Newman Guide” schools—are at least they worth the high costs?

It’s becoming increasingly difficult to answer with an unambiguous “yes.” All universities, including faithful Catholic ones, have two main selling points: (1) they are a “good investment,” i.e., they help graduates obtain jobs significantly higher-paying than non-graduates receive; and (2) they give young people an “Experience” that helps them grow and develop into successful adults. In the case of faithful Catholic schools, that “Experience” is an environment where the Catholic Faith is supported and encouraged.

Again, as I’ve noted, most non-Catholic (and non-Newman Guide) schools fail miserably at least on the second selling point, if not on the first (after all, if the government has to bail out college grads who can’t pay off their loans, how is it that college itself was a good investment?). But setting aside the very real possibility that the cost of college is no longer a good investment just from a financial perspective, at some price point even the potentially wonderful “Experience” at faithfully Catholic schools can no longer be worth it. Have we reached that point?

Most parents who want to send their kids to Newman Guide schools do so because they want their kids to (1) not lose their faith; and (2) establish lasting friendships (and possibly marriages) with fellow faithful Catholics. (Discloser: two of my children have graduated from Newman Guide schools, and two currently attend such schools.) For a long time, this has been worth the extra sacrifices necessary to attend these schools, even if it meant accruing some debt. These loans, along with working multiple jobs, qualifying for various scholarships, and perhaps a little help from mom and dad could make it possible. 

But as college costs continue to rise—propelled largely by easy loans and now loan forgiveness—attending these schools can lead to excessively burdensome financial strains on graduates, which will have long-term negative consequences. The Newman Guide school graduate might have met another faithful Catholic to marry, but now they both are burdened with substantial debt, forcing them to live dual-income lives and/or consider putting off having children just to meet their debt obligations. 

I personally know graduates of Newman Guide schools who took on $50,000+ in college loans to major in a degree that will likely result in a job paying them less than $40,000/year. That’s financially insane, and it’s only getting worse. And what’s not just insane, but bordering on immoral, is that most of these schools—Catholic schools—never make a peep about the difficulties such choices will create. 

When one of my daughters was applying to schools a few years ago, a Newman Guide school, in its financial aid offer, suggested not only that my daughter take on significant debt, but that I should as well! The school recommended that my wife and I take on around $60,000 in total parental debt to help my daughter attend their school. With seven kids, if I followed that plan for all of them I’d be $420,000 in debt (not including the inevitable inflation) by the time the last one graduated from their esteemed institution. I hope at least one of them marries a billionaire!

Because of this broken system—which Catholic schools didn’t create but have to live under—Catholics are looking for alternatives. Fortunately, it’s becoming less true that a four-year degree is necessary to obtain a well-paying job. Thirty years ago I graduated with a degree in Systems Analysis, and such a degree was necessary to obtain a software developer job. Now that’s not true. There are a million ways to train oneself in technology, and those with an aptitude can easily start careers in the field without a college degree. The same is true of many other industries.

But what about the “Experience?” What about the very real benefits of being in a strong Catholic community for four years, like those offered by certain Newman Guide schools, around peers who also care deeply about their faith? Such an experience does not have a price tag (but if it did, it wouldn’t be over $200,000 and years of overwhelming debt!). There is an alternative, however: be part of a Catholic community before going to college. 

I’ve noticed that children who grow up in areas of the country where strong Catholic communities exist are less likely to go off to a far-away college in order to get the Catholic “Experience.” After all, they have it right under their noses already. They already have many peers who are serious about the faith around them—they don’t need to find one hundreds of miles away from their family.

So if you are a parent of young children and want them to have a Catholic community when they grow up but are concerned about the costs of Catholic college, consider making the radical step now to move to an area with an existing strong Catholic community. Your children can stay in the area after high school, possibly attending a local community college or trade school, and continue to have peers with similar values and faith as they do. Most of the “Experience” with none of the costs.

Faithful Catholic colleges also must consider radical changes. It’s not their fault they are part of a system that financially burdens young people with little return. At the same time, they need to look for ways to leave that system. Stop trying to keep up with the other higher education Joneses. Instead, consider abandoning the federal financial aid system, as well as cutting out the “extras” that make schools more expensive without adding to their educational value, and work overtime to build up internal scholarship programs. The Newman Guide school “Experience” may be great, but not if it’s followed by years of financial hardship. 

If faithful Catholic colleges don’t make these changes, they may very well find that the market for their services has dried up. What started as a government program to push everyone to college may end up spelling the end of faithful Catholic colleges.


  • Eric Sammons

    Eric Sammons is the editor-in-chief of Crisis Magazine.

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