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A Non-Radical Argument Against Student Debt

One of my demands, when asked about demands, is for universal free higher education and the forgiveness of existing student debt.  This is one of those places where I think all of us who argue in good faith (so, Paul-bots and neo-Nazis, you’re out) can meet — radicals, leftists, socialists, anarchists, progressives, liberals, and so on.

One need not be radical to want an end to student debt, though I humbly submit that spending much time with the scions of the occupation will radicalize just about anyone who shows up with an open mind.  A person who supports the continued existence of something like our current social, economic, and political systems, maybe with a little reform and tweaking here or there, should be very, very worried about the current state of student debt in the US.

To recap, the combined outstanding student debt owe by folks in the US is now more that $1 trillion, both through government and private loans.  In 2010 alone, we borrowed $117 billion.  Though things have improved slightly in recent months, the US also suffers from continued high rates of un- and underemployment, low minimum wages, and low workforce participation, and all of these things are particularly acute for recent graduates.  Recent grads often do not have extensive employment history, concrete skills, or a solid professional network, all of which help workers find employment.  On the flip side, college graduates often hear that they are ‘overqualified’ for unskilled work, which is really just shorthand for ‘we might have to pay you more, and you might want to be treated better, than someone without a degree.’  Additionally, some colleges and universities have begun denying transcripts — sometimes required for job or grad school applications –to graduates who have defaulted on their loans.

Anyway, my point is, the cost of higher education, and the loans we’ve taken out to cover it, is a threat (in a bad way) to the fabric of our society, and even the most politically tepid centerist should be concerned.

Since I’m intimately familiar with the details of my own life, I’ll use myself as a case study.

In May 2006 I graduated from a well-thought-of private college with about $20k in student loans, all either Direct or subsidized Sallie Mae loans, which offers a certain amount of protection compared to private loans.  Six months after graduation I started repaying them, at a rate of $150 a month.  This was manageable, if barely so.  I was very lucky and found a full-ish time job at slightly-higher-than-minimum wage through my friends and my alma mater’s old girls’ network shortly (very shortly!) before I had to start making payments.  With it, I was able to pay for rent, utilities, car insurance, health insurance and healthcare (thanks for the affordable insurance, Massachusetts!), groceries, gas in the car, and student loans.  Every month, if I was careful, I broke even.  I was unable to do better than that, not saving anything, and often needing help from family for unexpected or large purchases.

After a year, I went went to grad school for my MLS, looking forward to having solid skills and credentials with which to reenter the workforce.  While in school, I didn’t have to make payments on my loans.  Over the next two years, I took out an additional $30k in subsidized and unsubsidized Sallie Mae loans to pay for my degree.  I had planned to take three years instead of two, and to work the whole time, so I’d be able to pay more out-of-pocket and borrow less.  But, my employer moved from Massachusetts to NYC, and I couldn’t find anything to replace that job with, so I sped things up and finished in two years.

In August 2009, when I finished my coursework, I owed just over $50k.

But I had marketable skills!  Right?  Right?

Do you remember 2009?  I remember 2009.  The economy was in free-fall.  Workers were being laid off left and right.  No one could get a job, because there we no jobs to be had.

I did a semi-reasonable-at-the-time thing and moved to Nashville, TN.

My then-partner, Greg, who I’d been living with for a year at that point, had finished his bachelor’s that winter, and was starting a biology PhD — with the tuition waivers and stipends and grants that entails.  With moving back to my parents’ house on Long Island as the alternative, and wanting to continue the relationship, moving to Nashville with him seemed like the best option.

Like me, Greg also had about $50k in student loans.  His, though, were all from undergrad at a public university.  Which is a completely ridiculous thing.  So, between us, when we moved to Nashville we owed over $100k in student loans.

Here’s where we get to the destruction on the social fabric.

Let’s pretend that Greg and I weren’t an anti-marriage-and-baby couple.  Let’s pretend that we were typical of millions of Americans in their twenties and thirties, and were looking to maybe get married, find some stability, start planning a family, all that white picket fence stuff.

The burden of our debt would have made that vision of the American family nearly impossible.  In Nashville, and many other areas of the country, $100k is a nice mortgage.  That’s a lot of money that might otherwise have gone to savings, retirement accounts, or other investments.  The amount we paid towards our student loans each month is roughly equal to rent in Nashville.  If we’d decided to have kids, it’s money we wouldn’t be able to put away for their eventual college educations.  It’s money that wouldn’t be recirculated into the local, national, or global economies, as our discretionary spending was heavily curtailed.

Further, I couldn’t find employment.  I worked part time for a little while, but there were precious few library or archivist jobs available then in Nashville.  In a year, I saw maybe a dozen advertised, applied for most of them, and had two interviews.  This meant I couldn’t repay my loans when they came due.  All told, I have to make payments of $600 a month.  Thankfully, my parents were able to help me out, and they ended up footing the bill for my loans for about a year.

Greg and I are no longer together, and I’m no longer in Nashville and am now fully employed.  I have my own little apartment in Brooklyn and have a job with a decent salary.  Once again I found employment through luck and the old girls’ network, rather than the endless rigamarole of resumes and cover letters and interviews.  I still pay about $550 a month towards my loans (having paid off a couple of the smaller ones).  Sometimes I imagine what I’d do with an extra $550 a month.  I’d live in a nicer apartment, closer to Manhattan, that didn’t have a long subway ride to work.  I’d put a few hundred dollars a month into savings, whereas I currently usually can only do that on months that have five Thursdays, which is my payday.  I’d be able to help out my friends, many of whom haven’t been as as lucky as I’ve been, more often.

I’m clearly one of the lucky ones.  I have a job!  A good one!  I have my own apartment!  I can actually repay my student loans!  Many of my peers don’t have these things.  For a while my brother had four jobs, and we joked that at least he could find them.  But no one will hire him full time or give him benefits.  He can’t make the payments on his student loans, so my parents are now paying those.  He is mostly supported by his partner, who is lucky to have a good job, but the family has often wondered it would make more sense for him to move home.

If we don’t do something about the cost of higher education, and do it fast, it will slow down the national economy for at least three generations.

My parent’s generation is spending money — if they have it — to keep their kids from defaulting on student loans.  That money could otherwise be going to their retirement.  Fewer and fewer workers, even government and union workers, are guaranteed pensions, and many older workers who had planned on retiring in the coming years are now unable to due to the state of the economy and the drastic drop in value of their existing retirement funds.  This means the older generations need to be putting that money away, rebuilding their nest eggs, rather than supporting their kids.  It means the older generation will be working longer, which in turn means even fewer jobs available to younger workers.  On top of that, many young workers either return to their parents’ households or never leave them, unable to find work with will support them out on their own.  It doesn’t mean we are lazy, as many pundits have declared.  It means we are out of other realistic options.  For our parents, it means the continued cost of supporting their young adult children, further cutting into their ability to save for their later years.  And god forbid our parents cosigned our loans!

For myself and my peers, we are facing economic setbacks that will follow us for the rest of our lives.  Those of us who can’t make loan payments will see our credit history badly tarnished, which impedes our future ability to borrow or to pass credit checks — which makes housing, say, a lot harder to obtain.  If we are able to make payments, that is, as I’ve already noted about my own budget, money that we can’t do anything else with.  The general economy suffers because we are not paying for an awful lot of goods and services we might otherwise be paying for.  What’s the monthly payment on $1billion?  That would be quite the stimulus package.  And, supply-side economics, which even its originators knew to be bullshit, to the contrary, that’s how the economy moves — through people spending money of stuff.

Further, our inability to find jobs now compounds in our future employment and earning.  A few years out of work at the beginning of one’s career means lower income and seniority throughout one’s working life, than would be had if a new graduate went straight to work.  It also sometimes means that we rack up additional debt trying to get or stay on our feet.  And, a gap in employment records makes it much harder to get hired at all.  All this means that it’ll take even longer to repay our student debt than we expected even a few years ago.

And then, as we go through life, we’ll be at a constant disadvantage.  That’s retirement money we’ll never save, perpetuating and extending the problems our parents are now facing.  That’s the down payment we’ll never have for a house.  In an expensive city like New York, that’s involuntary living with roommates into our 30s.  That’s the car repair or medical bill we can’t afford — now, and in the future.  That’s the person we might want to marry, but can’t risk mingling finances with.  That’s the kid we might want to have, but don’t think we could afford.  Maybe it’s the abusive relationship we want to leave, but don’t have another means of support with which to do so.  Maybe it’s the plane ticket to see an aged relative one last time.

Could student loans be single-handedly destroying the American family? (It could use destroying, but I was hoping the destruction would be through something a little cuddlier.)  We’ve got a lot of folks in this country spilling a lot of ink over that state of the American family; maybe, if they are sincere, they should look at the debt burdens of those potential young families.  When I was living in Nashville, Greg and I went to hear a lecture by  Michael Kimmel, a well known sociologist who specializes in masculinity and gender.  His book about young men in homosocial culture, Guyland, had recently come out, exploring how current hegemonic masculinity is preventing young men from meeting the benchmarks of adulthood — education, gainful employment, living on one’s own, family formation, etc. — that earlier generations of men easily assumed.  Greg wondered, during the Q&A, if perhaps evolving gender roles and the fragmenting of a formerly more monolithic popular culture meant that young men who wanted lives other than those typified by the mid-20th century United States were finding it easier to follow those desires, rather than being shoe-horned into breadwinning for a nuclear family.  And I pointed out that perhaps young men weren’t choosing such a life because, for an increasing number of them compared to their fathers and grandfathers, it wasn’t an economically realistic option.  Rightwingers want more marriages and more babies?  Maybe try lowering the price of entrance into adulthood.

And then, for those of us who want to and manage to reproduce, there’s the next generation to think of.  Forget saving for kids’ college funds (or anything else); my peers and I will be paying for own education until we are in our mid-30s at the very least.  And higher education is only getting more expensive.  Tuition at many private colleges and universities is currently about the same as the median family income in the US, which is an historic novelty.  In 2030, what might tuition be?  And, how will we and our children pay it?  Unless we actively do something about the cost of higher education, and do it very, very soon, it will be an impossible thing.  How much debt will our children go into for their education?  Or will they forgo it all together as unattainable, and this when a degree is becoming more and more necessary to earn a living wage?

So, as I said at the beginning, one does not have to be a radical to want to change the system by which we currently pay for higher education.  At this point, anyone who wants to preserve the mediocre status quo of American society should have come to the same conclusions.


About oneofthelibrarians

Respectable mid-career librarian by day, dirty street librarian by night & other days.

One comment on “A Non-Radical Argument Against Student Debt

  1. Jeremy D.
    February 14, 2013

    This is a great illustration of the infectious, harmful effects of the student loan system.

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This entry was posted on February 13, 2013 by in Economics, Education, Impending Doom and tagged , , , , , .

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