Tuesday, July 9, 2013

Why student loan forgiveness must happen!

'cooperunion_dec08_DSC_0195' photo (c) 2012, Michael Fleshman - license: http://creativecommons.org/licenses/by-sa/2.0/
Outstanding student loan debt in America is roughly $1 Trillion, surpassing auto loans and credit cards as the biggest source of consumer debt besides mortgage loans.  Each year 60% of college student borrow money to help pay for college.  Adding in past borrowers, the number reaches approximately 37 million nationwide. Of those 37 million, the under 30 age demographic has the most borrowers at 14 million. The average student loan balance for all age groups is $24,301 with an average monthly payment on student loan debt is about $290. That’s a lot of money!

The average income for college graduates is $37,000 to $62,000, depending on degree field. If a graduate with student loans is making $50k a year, about $10,000 of that will go to taxes (be they federal, state, FICA, etc.)  Of that remaining $40,000, about $300 monthly will go to student loan repayment. That’s nearly 10% of one’s monthly income! How’d you feel about losing out on 10% of your income EVERY month for at least ten years.  That’s about $35,000 over the life of the loan repayment. It’s quite a hefty sum.

As student loan debt creeps its way into the political conversation more, those who have never had to take out student loans are often the most outspoken.  Either their parents were well off enough to pay for their schooling out of pocket, or they followed the advice of Mr. Mitt Romney and “borrowed money from (their) parents.”  In some cases there seems to be a sense of superiority, that they are better because they didn’t have to borrow money for school for whatever reason(s). 

Anyone who was able to work their way through college or get a scholarship should be grateful, not vengeful to the others who did not. In reality, only about 10% of college students get scholarships, and most jobs aren’t going to cover every expense either. Further, if  parents footed the bill, that says nothing of one’s own abilities, only theirs.  As author Randall Robinson wrote, true to American capitalism, you simply got to start from where your parents left off.

'Stats about student debt' photo (c) 2011, Jagz Mario - license: http://creativecommons.org/licenses/by-sa/2.0/So with student loan debt being roughly $1 Trillion, this is an issue that isn’t going away. It’s inevitable that student loan debt will soon become the punching bag of conservatives.   The mythical ideology of “personal responsibility” stands in stark contrast to student loan debt. Student loans are all about depending on the government and not being “self-sufficient,” both of which the Right detest.  They will cry, “why bail out irresponsible students who didn’t take enough responsibility to pay for their own education?” Or, the familiar, “why should ‘makers’ subsidize the ‘takers’?” Trust me, it’s going to happen. And unless something drastic happens, the cycle will only continue, for instead of saving money for their kids’ college education, debtors will still be trying to pay off their own.

Here’s the reality. America has been cutting higher-ed funding and raising tuition for years just to keep taxes on the rich low. While the Right blames government for rising tuition rates, they ignore the cuts they themselves impose to state education budgets.  Public policy has created the student debt situation we have today. Don’t tell me now that debt forgiveness is letting borrowers off easy.  If America had been doing the right thing, we wouldn’t have this situation to begin with.  For the future of American commerce we need an educated workforce, for the future of our democracy we need an educated electorate, and for the future of our society we need an educated populace.  Look, we could have avoided this problem in the past by doing the right thing, but the problem can still be fixed. It’s as simple as student loan forgiveness. Let’s do this!

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