FacebookTwitterRedditEmail

Ending the Generational Abuse of Student Debt

When I speak on college campuses, I ask students to write the amount of debt they anticipate graduating with on a slip of paper.

In a recent class of 25 undergraduates at Boston College, just eight will graduate without debt, either because of full scholarships or family wealth. For the rest, an imposing debt looms — $40,000 on average, but with six reporting more than $150,000.

Can you imagine being 22 and having $150,000 in debt? This is generational abuse.

Previous generations were propelled forward by free or very low-cost higher education at land-grant universities and robust free college systems in states like California and New York.

Entrepreneur Dariel Garner attended both undergraduate and graduate school at University of California, Berkeley, free between 1968 and 1975. “I got a world-class education for free,” he told me. Within decades, he’d amassed a multi-million dollar fortune from several enterprises.

Garner blames the withdrawal of state support for public higher education as a driving factor for the ballooning debt of today’s grads. “We used to tax the rich and invest in public goods like affordable higher education,” said Garner. “Today, we cut taxes on the rich and then borrow from them.

Overall state funding for public colleges has fallen $7 billion below its 2008 level. Colleges have cut faculty and increased tuition and fees, effectively shifting the bills onto students and their families. Many students drop out, unable to finish their schooling due to rising costs.

Putting tens of millions families into debt servitude serves no economic or societal purpose. It’s damaging not only to individual finances but to society and the economy as a whole.

A mountain of research shows that student debt is tripping up the next generation, just as they attempt to hit their earnings stride. Student debt delays household formation, discourages entrepreneurship and public service, and thwarts homeownership, among other forms of wealth building.

No wonder a shrinking percentage of college graduates feel their degree is a ticket to the middle class, according to a long-running survey of U.S. social attitudes.

According to the Federal Reserve, monthly student loan payments increased from $227 in 2005 to $393 in 2016.

More than 44 million households are saddled with student debt averaging in excess of $37,000. The total student debt burden of $1.5 trillion now exceeds total credit card debt, and is only second to consumer mortgages.

One in five of these loans are in default. And those who attended predatory for-profit institutions are disproportionately likely to fall behind on their student loan payments.

The only beneficiary of this debacle is a parasitical student loan industry — a leech on the economy.

Nearly all Democratic presidential candidates have put forward plans to address the issue. “There is more consensus about the need to go big on college affordability” than ever, observed Mark Huelsman, a policy researcher at Demos.

Sen. Elizabeth Warren has a comprehensive plan to reduce existing student debt and establish universal free public college.

“The enormous student debt burden weighing down our economy isn’t the result of laziness or irresponsibility,” she said. “It’s the result of a government that has consistently put the interests of the wealthy and well-connected over the interests of working families.”

Warren’s plan would cancel up to $50,000 in student loan debt for households with income under $100,000 and provide some debt relief for households with incomes up to $250,000. She also proposes a new federal investment in public higher education that would eliminate the cost of tuition and fees at every public college, splitting the costs with states.

The one-time debt cancellation plan and universal free tuition going forward would be paid for by a 2 percent annual wealth tax on households with fortunes of more than $50 million.

Students in California have put forward a similar plan to restore California’s estate tax, a levy paid only by households with wealth of more than $5 million, to reduce tuition for 2.2 million California students at public institutions.

These are good ideas. Ending the generational abuse of student debt will expand educational opportunity, unburden our young people, and boost the economy for all.

Distributed by Inside Sources.

More articles by:

bernie-the-sandernistas-cover-344x550

June 26, 2019
Jaspal Kaur Sadhu Singh
Correcting a Colonial Injustice: The Return of the Chagos Islands to Its Natives
Binoy Kampmark
Violent Voyeurism: Surveillance, Spyware and Human Rights
Jonah Raskin
Reflections on Abbie Hoffman and Joshua Furst’s Novel, Revolutionaries
Dave Chapman
The Hydroponic Threat to Organic Food
June 25, 2019
Rannie Amiri
Instigators of a Persian Gulf Crisis
Patrick Cockburn
Trump May Already be in Too Deep to Avoid War With Iran
Paul Tritschler
Hopeful Things
John Feffer
Deep Fakes: Will AI Swing the 2020 Election?
Binoy Kampmark
Bill Clinton in Kosovo
Kenneth Surin
Brief Impressions of the Japanese Conjuncture
Edward Hunt
Is Mexico Winding Down or Winding up the Drug War?
Manuel E. Yepe
Trump’s Return to Full-Spectrum Dominance
Steve Kelly
Greed and Politics Should Not Drive Forest Policy
Stephen Carpa
Protecting the Great Burn
Colin Todhunter
‘Modified’: A Film About GMOs and the Corruption of the Food Supply for Profit
Martin Billheimer
The Gothic and the Idea of a ‘Real Elite’
Elliot Sperber
Send ICE to Hanford
June 24, 2019
Jim Kavanagh
Eve of Destruction: Iran Strikes Back
Nino Pagliccia
Sorting Out Reality From Fiction About Venezuela
Jeff Sher
Pickin’ and Choosin’ the Winners and Losers of Climate Change
Howard Lisnoff
“Bomb, Bomb, Bomb Iran”
Robert Fisk
The West’s Disgraceful Silence on the Death of Morsi
Dean Baker
The Old Japan Disaster Horror Story
David Mattson
The Gallatin Forest Partnership and the Tyranny of Ego
George Wuerthner
How Mountain Bikes Threaten Wilderness
Christopher Ketcham
The Journalist as Hemorrhoid
Manuel E. Yepe
Yankee Worship of Bombings and Endless Wars
Mel Gurtov
Iran—Who and Where is The Threat?
Wim Laven
Revisiting Morality in the Age of Dishonesty
Thomas Knapp
Facebook’s Libra Isn’t a “Cryptocurrency”
Weekend Edition
June 21, 2019
Friday - Sunday
Brett Wilkins
A Brief History of US Concentration Camps
Rob Urie
Race, Identity and the Political Economy of Hate
Rev. William Alberts
America’s Respectable War Criminals
Paul Street
“So Happy”: The Trump “Boom,” the Nation’s Despair, and the Decline of Joe Biden
Jeffrey St. Clair
Roaming Charges: Ask Your Local Death Squad
Dr. Vandana Shiva
Fake Food, Fake Meat: Big Food’s Desperate Attempt to Further the Industrialisation of Food
Eric Draitser
The Art of Trade War: Is Trump Winning His Trade War against China?
Melvin Goodman
Trump’s Russian Problem
Jonathan Cook
Forget Trump’s Deal of the Century: Israel Was Always on Course to Annexation
Andrew Levine
The Biden Question
Stanley L. Cohen
From Tel Aviv to Tallahassee
Robert Hunziker
Permafrost Collapses 70 Years Early
Kenn Orphan
Normalizing Atrocity
Ajamu Baraka
No Dare Call It Austerity
Ron Jacobs
The Redemptive Essence of History
FacebookTwitterRedditEmail