"If we could bail out Wall Street, we sure as hell can reduce student debt in this country."
Bernie Sanders
The student loan problem is real. Something needs to be done. Whatever happens won't feel fair and just to everyone.
Forty five million young people carry student debt. In 2018 students graduated with an average of $29,800 in loans. The total debt is $1.5 trillion, with a "T", a number half again bigger than the total for all credit card debt.
The debt has consequences in the politics of immigration. Young adults in debt delay child bearing and have smaller families, and that contributes to the below-replacement birthrate of native born Americans. Social conservatives share demographic panic in email chains that come my way, emails warning of invasion by Islam and Latinos immigrants filling spaces that would have--should be--filled by fertile native born Americans. White nationalists chant "You will not replace us." Trump's circle-the-wagons message of white Christians under siege finds fertile ground.
The Baby Boomer experience with college affordability is much different than the experience of young adults today, and it fuels the political generation gap in the Democratic party. The generation in power today--Democrats and Republicans-- got theirs, and then dis-invested in higher education for the generations that followed.
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| Haley |
Student loans are a kind of litmus test for Democratic candidates. Bernie Sanders and Elizabeth Warren have the most generous plans. Other candidates suggest something less expensive. They make references to the value of students having "skin in the game" and the the multitude of choices, sacrifices, and compromises young people make. Debt forgiveness and restructuring feels more or less just depending on the situation and choices of each person.
Some students choose the less expensive school rather than their preferred one.
Some choose community college rather than a university.
Some choose not to go to college to avoid the debt.
Some work their way through college.
Loan forgiveness programs are a transfer of wealth from the old to the young and generally from higher bracket taxpayers to the less wealthy. This is a controversial but politically defensible situation: progressive taxation and paying it forward. But there is more. It is also a wealth transfer from the non-college population to the college educated and from the people who delayed gratification and sacrificial choices during their college years to the people who had an easier, richer college experience by borrowing money.
Loan forgiveness programs are a transfer of wealth from the old to the young and generally from higher bracket taxpayers to the less wealthy. This is a controversial but politically defensible situation: progressive taxation and paying it forward. But there is more. It is also a wealth transfer from the non-college population to the college educated and from the people who delayed gratification and sacrificial choices during their college years to the people who had an easier, richer college experience by borrowing money.
Haley's story.
Haley is the Desk Clerk at the La Quinta Inn in Manchester, New Hampshire.
She was on the job at 6:30 a.m. She looked tired. I asked her if it was the beginning of her shift or the end. The end, she said.
She told me she works graveyard, from 11:00 p.m. to 7:00 a.m., a pretty good shift, she said, because during the quiet periods she can get a little homework done.
She said she attends college full time, studying biology, hoping for a professional career, saying she will need at least a Masters Degree to get a job in her field. Her real problem is that it is a 90 minute commute each way to the school, and there are classes in the morning
and labs some afternoons before she drives back to Manchester.
and labs some afternoons before she drives back to Manchester.
I asked when she had personal time. She said that was for sleeping.
She said on weekdays she got to sleep for four or five hours in the evening, would set her alarm for 10:00 p.m, to be at work by 11:00. I asked why she was working so hard now.
She said, "I really don't want to graduate with student debt."
[I asked Haley if she minded if I wrote about this and included her photo. She said sure, go ahead.]
Democrats run a risk, and Haley is an example of it.
Every young person has an individual story based on his or her own choices. People who sacrificed to avoid debt will have their taxes used to pay off the debts of people who didn't sacrifice. Haley is not a selfish plutocrat. She is a young, scrappy, ambitious, hard working person. Democratic programs may have her paying for college twice, once for her own, once for others, and very likely for someone more prosperous than herself--a regressive tax that will be hard to defend politically.
Every young person has an individual story based on his or her own choices. People who sacrificed to avoid debt will have their taxes used to pay off the debts of people who didn't sacrifice. Haley is not a selfish plutocrat. She is a young, scrappy, ambitious, hard working person. Democratic programs may have her paying for college twice, once for her own, once for others, and very likely for someone more prosperous than herself--a regressive tax that will be hard to defend politically.
Something needs to be done, but whatever it is won't feel fair to everybody.
7 comments:
Great article on a very important subject. We must encourage higher education and life long learning for all Americans. One concern I have is the interest rate being charged on student loans. It should be as low reasonably possible. Another option is 2 years of community college and then transferring to a 4-year school. Some states are very creative. In Tennessee, proceeds from the state lottery pay for college scholarships. The lottery is called "The Tennessee Education Lottery." Also, 2 years of community college tuition is free. Loan forgiveness can be tied to public service after graduation.
On some campuses, dorms and facilities are much nicer than they used to be. This drives up costs. Obviously technology is very expensive. Administrative salaries in higher education tend to be high. That is why retired politicians seek positions in higher education. They receive a generous salary, good benefits, and hefty retirement benefits.
"The red state that loves free college," Politico, 1-16-19.
Does moral hazard (the risk of loss due to “skin in the game”) apply to the Millennials who were told they ‘must’ get a college degree to achieve the American dream (and, like Haley, preferably a graduate degree) but not the big banks? Joe, why did you and Barry bail out Wall Street while millions lost their homes on Main Street? Joe, how do you expect to win when student loan debt became not eligible for discharge in bankruptcy in 2005 largely due to your efforts? The government can now garnish my social check because of bankruptcy “reform “!
Thanks, OBiden!
Whatever the plan ultimately is, this is an issue that will encourage younger voters to support Progressives.
The "fairness" argument is inconsequential. The plan can easily have a retroactive rebate, either cash or some other perk. The most important thing in my view is that the issue is sincerely addressed and not just pandering. It should also be tied to efforts to increase opportunities for graduates, particularly in the sciences. We should look at the in-state vs out-of-state discrepancies in admission and tuition that limits where qualified students can attend. It's a big complex issue that demands long term thinking and a serious commitment both to young people and the future of our nation.
The US is falling behind on many educational measures, not for lack of talent, but due to a system that views students as consumers, not a resource to be conserved and nurtured.
FACT CHECK: President Obama did not become president until 2009.
The Wall Street bank bail-out occurred under George W. Bush.
Stop the lies.
This is more complex than our sound-bite attention span will abide. We have the ‘Higher-Ed Industrial Complex’ (sorry Ike) that promotes a mythical narrative that it alone is the key to personal and professional success. And we buy it hook line and sinker. I know young college grads with BS in biology and neurobiology working as $8.50 lab technicians. I work with colleagues having paid over $250k and 6-7 years of schooling for their BAs and MBAs making 60k/year as business analysts in Seattle where the median rent is more than 1/2 their gross paycheck. Many companies perpetuate the higher ed myth by requiring 4 year degrees for the most menial jobs, while they complain about talent drought. Most young college grads I speak with find themselves disillusioned with the failure of their education to deliver on the promise of prosperity.
Unburdening debt-ridden graduates and providing a path to affordable education is a political hot potato and important. But holding schools accountable to provide useful education, and do more than satisfy their accreditation councils or endowment donors is a much bigger issue.
Anonymous, I agree with you on all points (although Obama should have followed through on the prosecution of banksters): https://www.counterpunch.org/2014/03/28/obamas-big-lie/
And I owe you and readers an apology for my cranky/snarky reference the other day to Biden's propensity for gaffes, specifically, referring to the outdated word "record-player." The context was, in retrospect, ageist and you were right to call me on it. Mea Culpa.
(I do have a concern, however, that, up against Trump, said propensity will prove a serious liability to Biden and the Party.)
The idea of free college is important for more than economic reasons. Defining success as solely the ability to survive materially or to accumulate wealth limits what it means to be fully human.
Andy Seles
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