Would you give up your right to vote in exchange for loan forgiveness?
Brian Rock, New Leaders Council New Jersey
Would you give up your right to vote in exchange for loan forgiveness?
If you’ve been reading the news lately, you might think that half of the millennial generation would gladly make that trade. But I’m here to tell you that I wouldn’t, my peers wouldn’t, and this narrative is distracting us from the real question.
What are we as a society willing to do to wipe out student debt?
The survey in question was conducted by Credible, a debt consolidation company. It’s an understatement to say that this was unscientific and self-serving. The question is leading, and the methodology contains no mention of randomization or efforts to mitigate sampling error.
One might forgive Credible for creating this clickbait. After all, they’re a private company trying to generate interest and profit. But the media ought to be held to a higher standard, and it’s a shame that outlets like CNBC and the Daily Caller are willing to report on this survey as if it was conducted by Gallup.
This plays into a tired trope that the millennial generation has made its bed and now we have to lie in it. First, we were shamed for buying avocado toast instead of taking out a mortgage. Now, we’re being blamed for our mountains of student debt.
Consider this instead: it’s not our fault and it’s not our problem alone. The student debt crisis is the product of continued disinvestment in public higher education and it is forcing millennials to make real decisions that are creating a drag on the economy as a whole.
Fifty years ago, tuition at a public four year institution would only cost you $310. If you stayed on campus, your total bill would be $1,089. Compare that to the cost of tuition ($8,453) and tuition, room, and board ($18,632) in 2014–15. If you adjusted the $310 you paid in 1968 by inflation, it would have cost $2,158 in 2015 — a quarter of what it actually cost.
The cost of college has skyrocketed in the last fifty years, and it has done so at a rate that far outpaced inflation.
This same time period has seen a significant disinvestment in public higher education. According to the American Council on Education, the government picked up 60% of the tab for college in 1975. This had dropped to 34% by 2010. The trend continued after the 2009 recession. According to the Center on Budget and Policy Priorities, state spending per pupil was down an average of 18% between 2008 and 2016.
Meanwhile, in the 1990’s the federal government implemented the Direct Lending program and injected billions of dollars into the public higher education system — in the form of loans that students would have to pay back.
At the end of this past school year, the federal government had a total loan portfolio of approximately one trillion dollars. This trillion dollars, borrowed in large part by millennials, offset funding cuts to public institutions and sustained our system of higher education through a period of rapid tuition increases and funding cuts.
In other words, y’all set us up to fail and now we’re dealing with the consequences.
Those consequences aren’t hypothetical choices, like whether or not we would give up our right to vote. Those consequences are real choices — whether to rent an apartment, buy a house, own a car, or start a family.
The Federal Reserve Bank of New York wondered whether there might be a connection between college debt and homeownership. Their report released in July 2017 is pretty clear. Millennials are still attending college at the same rates as their predecessors, but in the face of rising tuition they are taking on an increasing amount of debt. After they graduate, they’re more likely to live at home with their parents and less likely to purchase their own home.
An interesting observation from the report is that the average 30 year old in 2015 had the same amount of debt as the average 30 year old in 2003. But those Gen X borrowers had significantly more home-secured debt, auto debt, and credit card debt. The Millennials had debt portfolios that were overwhelmingly centered in student loan debt — 174% more student loan debt than their predecessors.
It’s pretty straightforward really. You can only handle so much debt, and if you’ve already got tens of thousands of dollars in student loans you’re going to avoid the typical forms of consumer debt that have driven the American economy for the last century.
A good friend of mine attended Rutgers University from 2006 to 2011, graduating with a Masters in Education. She was a first generation college student, and her immigrant parents hadn’t been able to save much for college. But she received some government support through Pell Grants and the Educational Opportunity Fund in New Jersey. She had to take out a significant amount of debt to finish school.
She graduated in 2011 and spent three years in China teaching. She made enough to support herself abroad, but she couldn’t afford the loan payments. When she returned home, her interest had capitalized and she owed close to $70,000.
She got a job teaching, which should have put her on the road to a middle class life. Instead, she struggled to pay her rent and couldn’t afford to buy a car. She lived at home with her parents for a bit, but she and her husband have moved out again since they had a baby this year.
It’s very possible that she’ll still be paying off her own loans when her child starts college. Do you think she’s going to be able to save enough for her child to go to school without taking out a significant amount of loans himself?
It doesn’t have to be that way. This debt is not only holding back millennials like my friend, it’s putting the brakes on economic growth. We should be looking to provide relief for current borrowers and changing the system so that future students are not saddled with the same inordinate amount of debt.
The public service loan forgiveness program provides one option. In this plan, if you work in public service and make ten years of payments in an income-based repayment plan, the balance of your loans will be forgiven. But this was written out of the 2018 budget, and the future of the program remains in doubt.
Instead of eliminating this program, it should be continued. We could also extend it — offering loan forgiveness for all borrowers after 10 years of payments.
As for future students, we’re seeing this addressed at the state level. New York now offers tuition free college to middle-class students. In New Jersey, Rutgers is piloting a similar program, although the income limits are far lower. In California next year, all students will be eligible for one year of community college tuition free.
The details of these policies vary, and they could certainly go further to provide more funding for room, board, and books.
But that’s the conversation we should be having. What are we as a society willing to do to ensure that our young adults can get an education and enter society without mortgaging their future? Because right now we’re all paying that mortgage along with them, even if we don’t know it.
Brian Rock is a social studies teacher in East Orange, New Jersey and he writes about civics education at The Civic Educator. He is the Vice President of his local teachers union and he is the Institute Co-chair for NLC New Jersey.
