Law School
Personal Finance

Book Review: Generation Debt

I first heard about Anya Kamenetz’s book, Generation Debt, during an interview with her on NPR. I was interested in her argument that Generation X and Generation Y have a good chance of being the first generation in America to be worse off then their preceding (Boomer) generation.

The main argument of Generation Debt is that because of higher education costs and lowering wages, young people face the prospect of not achieving a middle class life style. Kamenetz mixes statistics with anecdotal stories that show the disparaging circumstances young people. Many of the stories were heartbreaking and they all had the same theme: Boy or girl has dream of going to college and starting a career. Dream crushed by rising costs of college and stagnating wages.

What I liked about Generation Debt
I though Kamenetz made a strong argument for financial aid reform. The recent Sallie Mae scandals made her book even more relevant. If America wants to be competitive in the future, the government is going to have to invest much more in education than what it is investing now.

I also agreed Kamenetz that young people need to adjust their expectations. Everybody doesn’t have to go to college to be a success. For many young people it can be waste of time and money. Many of the people she interviewed in her book took on thousands of dollars in student loans in order to go to school. However, the only reason they were going was because that’s what every young person is supposed to do. By the time they realize college isn’t from them, they’ve accumulated $10,000 in student loans. Instead of just encouraging college, parents and counselors should also encourage vo-tech. I don’t know why vo-tech is so stigmatized. I know plenty of people who have gone to v0-tech, learned a trade, and are making a decent living. Both college and trade schools should be seen as equally viable steps to earning a living.

My Beefs With Generation Debt
I guess it’s the classical liberal in me, but I felt Kamenetz put too much blame on society/corporations/government for young people’s debt problems and not enough on the individual. For example, she argues because young people are the most advertised to demographic, young people are taking on more debt to buy stuff. I just don’t buy this argument. It’s called personal responsibility. I find it rather insulting to our generation that we’re dumb enough to buy stuff just because an advertiser says we need to.

Additionally, she makes the case against credit card companies preying on college students by giving out t-shirts and beer coozies. Yes, credit card companies market heavily to college students, but they’re not holding a gun to their head sign up. If you’re dumb enough to trade t-shirt for access to high interest rate debt, then you deserve to pay the bill. Perhaps it’s a fault, but I have no sympathy for young people with credit card debt, especially when the debt is for eating out, CD’s, travel, ect.

I also wish Kamenetz had more examples of young people making responsible financial decisions. Most of the book is filled with bad examples of young people spending money on iPods and vacations they can’t afford. It wasn’t until the end that she discussed young people who are living frugally and saving for the future. The discussion, however, was only a few pages.

Do I Recommend it?
Overall the book was… eh… Kamentz makes some good arguments about the rising costs of college education and the need for the government to invest more in education. However, I was turned off by her slightly whining tone. She made the young people sound like victims of forces they can’t control. However, many of the cases appeared just to be victims of bad personal decisions. I don’t think I would recommend someone to read the whole book. Rather, I would just direct their attention to the chapter discussing the situation of education costs.

[tags] Generation Debt, debt, Anya Kamenetz[/tags]