Revolution Brewing on Student Debt
Posted on May 7, 2012
The U.S. once led the world in free education. The recent debate in Washington about whether to let student loan interest rates double ignores the fact that many students already cannot afford a college education or advanced training.
The GI Bill funded the education of an entire generation of veterans, as The Nation reminds us. And while Pell Grants once covered 69 percent of college tuition, they now pay just 35 percent.
With a government that shows no interest in making education available to the many, some Americans are taking the initiative themselves. Students in California have suggested a program that would make a four-year education free for students who maintain at least a 2.7 grade point average or perform 70 hours of community service per year. —ARK
The student loan crisis has had two effects. The United States, once the leader in the percentage of college graduates age 25 to 34, has dropped to sixteenth among thirty-six developed nations, with more and more students dropping out because they can’t afford the rising costs. The second effect is ruinous debt: the average indebted college graduate is $25,000 in hock. Total student debt exceeds $1 trillion—now greater than credit card debt. And student debt is inescapable. Bankruptcy rarely extinguishes it; even Social Security payments can be garnished in case of delinquency.
These debts weigh down the entire economy. Many students are forced to move back in with their parents after graduation, which depresses the housing market. Public interest work is less affordable; as Pam Brown of the Occupy Student Debt Campaign puts it, “The debt makes us very individual; we can’t afford to help someone else.” Now more than half of college graduates under 25 can’t find full-time work, and wages for recent graduates are lower than they were in 2000. Not surprisingly, delinquencies—and the fines and penalties that follow—are rising.
… We can easily afford the estimated $30 billion annual cost of free college education; a financial-transactions tax would raise many times that sum, and it would inhibit destabilizing speculation on Wall Street. We would reap the benefits of a better-educated citizenry, and young people could be more entrepreneurial and more public-spirited.