Why You Should Join The #MillionStudentMarch: Student Loans

During a recent Yahoo news interview with Katie Couric, Bernie Sanders urged students to march on Washington:

“My view is that the only we can bring about an agenda that works for working families is if millions of people are actively involved in the political process. If a million young people march on Washington they to the Republican leadership, we know what’s going on, and you better vote to deal with student debt. You better vote to make public universities and colleges tuition free, that’s when it will happen.“

Soon, this call to action was echoed by young Bernie supporters and other progressive organizations, including a widely shared article for Socialist Alternative. The Million Student March is now a reality, with protests being held at campuses across the nation on November 12th.

We have three demands:

• Tuition-Free Public College
• Cancellation of All Student Debt
• A $15 Minimum Wage for All Campus Workers

Angry Millennials fully endorses these demands and each week, we will cover one major reason why every young person across the country should be in the streets on November 12th. We start this week with the most obvious issue facing students today, which we cover extensively on this site: Student Debt.

Rising Cost of Education

A common misunderstanding about the situation that students face, is that we could just work full or part-time while in school to pay off our tuition. Those who believe this myth are still living in a time when college was affordable. In the past four decades, the price of higher education has increased 1,200%. Yes, you read that correctly. Even with the soaring cost of medical care, and rapidly increasing rents in many large urban areas such as New York City and San Francisco, college has by far outpaced these expenses:

Of course, much of this increase could be attributed to private institutions like Columbia University or Sarah Lawrence College, which cost over $50,000 per year. However, public systems like City University of New York (CUNY) and University of California (UC) have also been raising their rates in the past few years. In the below chart, you can see that while the cost of private school has been soaring since 1982, more recently, public four-year and two-year tuition has begun to rise at the same percentage.

Recently, there has been a major shift in public opinion about the importance of a college education. Regardless, we no longer live in a world where a high school degree will guarantee you enough money to raise a family, let alone feed, clothe, and shelter yourself. Check out this chart from a recent study by the Bureau of Labor Statistics, which shows how each level of education will earn you higher weekly earnings on average, as well as a better chance of employment

We are essentially caught in a trap, needing degrees to participate in the job market while attending schools which cost more every year. Of course, not all families can afford to save for their children to go to college, especially since wages have been stagnant for the past 40 years. This is where student loans come in.

The Necessity of Student Loans

Over 40 million Americans now have at least one student loan, totaling an average of $29,000. The total amount owed is now almost $1.3 billion and growing, and this doesn’t even include capitalized interest. As you can see from the below table, which is based on a study from the Federal Reserve Bank of New York, Student loans have clearly overtaken every other type of debt since the Great Recession of 2008.

Do you see the issue here? No? Are you thinking that maybe education costs and student debt levels are soaring, but the degree earned will give us the tools we need to pay off our scary amounts of personal debt?

Underemployment and Dissatisfaction

While college graduates do earn a higher salary on average with a lower unemployment rate, there are millions of students who have taken out significant debt to pay for school, but now face a reality where they can’t find work or face low-paid underemployment. According to a McKinsey study, almost half of recent graduates are employed in positions which don’t require college degrees, and a third don’t feel that college prepared them for the job market.

You would think that those who went to a top college would be more successful in terms of job placement, but even among the top hundred 4-year colleges, 41% could not get work in the field they studied.

These results vary widely by major. Students who studied Science, Technology, Engineering, or Mathmatics (STEM), have much more successful outcomes, and feel that college prepared them well for employment.

Many students who studied liberal or performing arts, health, and business management, are earning less on average, and probably have greater trouble paying back their debt.

Delinquency and Default

Unlike all other types of loans, The 90-day delinquency rate on student debt has jumped considerably since the 2008 financial crisis. According to the New York Federal Reserve study, this rate was 11.3%, at the end of 2014, up .2% from the previous quarter.

Not just are roughly half of all students not meeting their financial expectations, but student debt is also not dischargable in bankruptcy, which is why these percentages will likely continue to rise.

When graduates go delinquent on their loans, they are at risk of falling into default, which has very nasty consequences. According to a Department of Education study, many students are defaulting on their loans, which is not a surprise considering what we’ve covered so far in this article.

While it might look like the default rate is falling, this is actually a cohort study of students who began student loan repayment between 2007 and 2011. What we actually see here is that for each year graduates are in repayment, their percentage of default is actually rising. At least 25% of all graduates of two-year institutions who began repayment in 2007–2009 are now defaulting on their loans. Among four-year schools, almost each cohort has at least a 9% default rate, except for-profit schools, which is due to many reasons.

Our education system is broken, and we are paying higher tuition each year for an education which is increasingly not helping us in the job market. However, we can’t give up. Students across the country must fight for a $15/hour minimum wage to rise the income of all workers. We must eliminate the tuition of public universities to provide an opportunity for all members of our society to obtain a higher education regardless of income. Finally, we must abolish student debt, because a large percentage of our generation has been robbed of our economic futures.

This isn’t impossible. We start on November 12th at the Million Student March. Sign up and find your local event at StudentMarch.org.

We are more than our degrees and job titles. We are not a loan. The time has come for us to stand up and fight back!

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Originally published at www.angrymillennials.com on September 4, 2015.