With a Crippled Nation Fully Dependent on a Handful of Professions, the Need for Student Loan Forgiveness is More Important Than Ever.
No matter where you sit in the student loan debate, the fact is 45 million young people are drowning with nearly $1.6 trillion in student debt, and it’s not getting better anytime soon.
This statistic alone is heartbreaking given our status as the wealthiest nation in the world, but to realize that a large portion of the Coronavirus frontline workers are also shackled in student debt makes it a hundred times more intolerable.
It's no secret that college has become more and more expensive over the last few decades. According to my sources, tuition and fees at a public, four-year university now costs more than $10,000 annually. That number skyrockets even higher when accounting for room and board expenses, just north of $21,000.
Thirty years ago, that number was just $3,360 when adjusted for inflation.
But what puzzles me is why so many people would have agreed to take on so much student debt? Isn’t it obvious the rising cost of a college education was meant to filter out the lower socioeconomic classes from being qualified enough to take high-paying jobs away from the privileged class?
Yes, higher college costs are simply a "privilege filter."
It's why certain gyms charge $500 a month while comparable machines can be found at gyms charging $10 a month. It's why country clubs charge $25,000 for annual golf memberships. It’s why some private schools charge $45,000 for a first-grade education. It’s not because their gym, golf course, or school is truly different in terms of amenities warranting such a drastic difference in pricing — higher costs are simply there to ensure a certain level of clientele, nothing more.
I honestly have no problem with this practice, as this is the beauty and freedom of America and people can charge as much as they like for their services as long as they do not have a monopoly on it or are the sole providers of a needed item or service (like insulin or kidney dialysis).
But when it comes to allowing frontline pandemic workers to continue with this burden, we must ask ourselves if this is the right thing to do as a nation.
The even bigger question is... Why would a young person agree to take on $100,000 or more of college debt knowing his or her profession’s starting salary would be less than $40,000 a year?
It's because their soul calls for that profession, particularly the need to serve others. And unfortunately, direct service jobs tend to be some of the lower paying professions in our society.
More and more people are leaving college with back-breaking debt that will drag them down for decades. Various sources indicate that nearly 3 million older Americans still have student loan debt and are relying on Social Security to help pay off some of what they owe.
The Federal Reserve reports that the average student pays $393 a month, and even that is a large chunk of money when first starting out as a young person.
According to Credit Donkey, Nurses graduate with an average of $40,000 to $55,000 worth of student loan debt.
In addition, MagnifyMoney.com states that a $100,000 loan at a 6.8% APR equates to monthly payments of $1,151 for ten years. That’s an enormous amount of money for any single person to pay for ten years! Rent, groceries, insurance, car payments, all leave very little left on a monthly basis.
Some Americans are even incurring massive debt without a degree to earn enough to pay it back. Between fiscal years 2015 and 2016, the U.S. News and World Report found that 3.9 million undergraduates dropped out with federal student loan debt.
Imagine dropping out of nursing school and trying to pay off $393 a month for ten years when your high-school graduate co-workers are making the same wage as you are.
In order to address this mounting economic crisis, many Progressive politicians have advocated using taxpayer dollars to make public collegiate institutions tuition-free. Some politicians, such as Vermont Senator Bernie Sanders, have even gone as far as to propose canceling all student loan debt for the nearly 45 million Americans who owe money. He was quoted as saying, "In a generation hard hit by the Wall Street crash of 2008, [my plan] forgives all student loan debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the 'crime' of getting a college education."
Student loan debt is such an economic burden that it has recently surpassed the outstanding sum of all credit card and car finance debt in the country, according to a recent article published in The Economist magazine.
The United States should have taxpayer funded, public college education to ensure there is equal economic opportunity for all American citizens. Doing so will spur economic growth, incentivize many more Americans to pursue a college degree, and will help mitigate the barriers being imposed by the growing severity of income inequality.
Several conservative policymakers believe that a college education should not be publicly financed in the United States. They argue that spending billions of taxpayer dollars to subsidize tuition fees will actually do very little to help students avoid incurring a massive amount of debt as there are many additional costs including books, housing, food, transportation, insurance, and more. However, the simple matter of fact is that providing public, tuition-free college will help students reduce the amount of money they will owe when they fully join the economy as a life-long consumer of goods and services.
Without loans, the chance of obtaining a college degree is otherwise out of reach for many students. The Harvard Business Review found the rising costs of attending college is forcing many families to take out loans in order to pay for the various demanding expenses of enrolling in higher education. And according to an article written by the College Board, tuition accounts for nearly forty-percent of total average college costs.
In addition, the CNBC article “Here’s How Much More Expensive It Is for You to Go to College Than It Was for Your Parents,” found that between 1987 and 2017, public college costs have increased by 213%.
However, I think it is important to note that well-funded private educational institutions such as Georgetown, Harvard, Princeton, and Yale, offer robust financial aid packages for families that make less than $150,000 a year. On average, out of pocket costs to attend an Ivy League school in 2020 is around $28,000, and can be as little as $10,000 a year according to The U.S. News and World Report. This is definitely a wonderful opportunity for students who qualify to attend these schools as starting salaries also tend to be higher.
If the United States government wants to invest in future generations of Americans, it is absolutely critical that we provide taxpayer-funded, public college education to all eligible citizens who are willing to pursue a college degree. The wealthiest nation on the planet, by far, has more than enough economic resources to ensure that future generations have a shot into making it into the upper middle class.
So, to address the concerns of conservatives who fear that allocating billions of dollars to subsidize tuition fees will not solve America’s student loan debt problem, we must turn back a few pages in American history.
The Servicemen’s Readjustment Act of 1944, more commonly known as the G.I. Bill, was a law signed by President Franklin D. Roosevelt that provided several economic benefits for returning World War II veterans. Under this law, 2.2 million veterans were able to earn a tuition-free college education, forty percent of whom would not have been able to enroll in college otherwise. The Debs-Jones-Douglass Institute calculated that the G.I. Bill generated a staggering $35.6 billion over three and a half decades, and added an extra $12.8 billion in tax revenue for the United States.
The G.I. Bill provided taxpayer-funded college education to hundreds of thousands of successful dentists, engineers, doctors, scientists, accountants, teachers, attorneys, Supreme Court Justices, Presidents, and so many more brilliant, generation-defining people.
Young Americans in 1944 put their debt-free college education into good use. They bought homes, automobiles, started families, and invested into the economy.
When right-wing politicians proclaim that spending billions of taxpayer dollars to publicly fund college education will only bring the nation towards the path of financial insolvency, remember that tuition-free college is the reason why the United States of America is an economic superpower next to none.
What we did for military veterans in the 1940’s can most certainly be translated into present times. Every single person who has put their life on the line to serve the public during COVID-19 should qualify for similar college benefits.
People who earned a burden-free college education will utilize it and invest into the economy. Study after study shows that there is no greater societal investment than college education, per an academic essay written by Max Page and Dan Clawson of the National Education Association. It is therefore appropriate to make the conclusion that implementing a taxpayer-funded public college education will help mitigate the crushing burden felt by millions of Americans all across the nation by spurring dynamic economic growth.
As per their report, “Macroeconomic Effects of Student Debt Cancellation,” they stated, “There is mounting evidence that the escalation of student debt in the United States is an impediment to both household financial stability and aggregate consumption and investment. The increasing demand for college credentials coupled with rising costs of attendance have led more students than ever before to take on student loans, with higher average balances. This debt burden reduces household disposable income and consumption and investment opportunities, with spillover effects across the economy.”
With such a debilitating burden as the collective $1.6 trillion of outstanding student loan debt owed by millions of aspiring students across the country, we must put partisanship aside and make higher education more affordable for all Americans — starting with the nurses, doctors, grocery store workers, transit workers, first responders and delivery persons who all kept working while we "stayed home."
If countries such as France, Norway, Finland, Germany, and Sweden can offer a free or low-cost college education to its citizens, then the United States — who has a much larger economy than the aforementioned countries — can most certainly do so as well. If we are to mobilize our national economy, provide equal opportunity for aspiring young people, and invest in future generations, then it is most critical that we provide tuition-free, public college education to all those who deserve it.
So, how do we pay for it? There are many ways.
We can cut military spending in low-risk countries. We can move capital gains taxes from a separate category of 20% to regular income tax brackets. We can implement a three to five cent national sales tax. We can increase the corporate-tax rate from 21% to 28%. We can reduce the amount of time profitable companies can write-off their losses. We can raise property taxes by 1%.
There are literally a thousand ways we can pay for this. And unlike every other politician in office, I am not afraid to say that I absolutely embrace taxes. Smart taxes. Painless taxes. The kind that cell phone companies charge on our bills and we even never notice. It’s how we tithe as a country. It’s how we raise money to fix things that truly matter. And once we realize that paying higher taxes is a privilege much like driving a fancier car — an act of gratitude for having succeeded in a Capitalist society where not everyone is equal — only then will we be able to provide a lifestyle for all Americans that truly feels special.
While I am in favor of tuition-free, public two-year and four-year college education for eligible American citizens, I am not in favor of completely cancelling all student loan debt at this time. Former New York City Mayor Michael Bloomberg has proposed cancelling all student loan debt incurred at predatory or for-profit colleges and universities. While I do agree with Bloomberg on this particular issue, I simply believe that cancelling ALL student loan debt at this time will lead to a slippery slope of demands from the American public.
Instead, I believe the United States should adopt a more pragmatic and incremental approach to this issue akin to what former Vice President Joe Biden and Michael Bloomberg have proposed in the 2020 Democratic Presidential Race.
According to The Economist, Joe Biden would reduce the student loan debt repayments from 10% of income to 5%. He has proposed all debt-forgiveness be tax free and raising the repayment threshold to $25,000. Michael Bloomberg, as I have previously mentioned, stated that he would have forgiven all student loan debt that was unethically incurred at predatory or failed for-profit universities, and impose an exemption of debt forgiveness up to $57,000 from tax.
That, to me, sounds fair. But for Coronavirus workers, the time is now to pay off their student loan balances.
Even leaders of the past supported free education. Our 19th Republican President, Rutherford B. Hayes, believed that education was the launchpad to prosperity, and for political and economic participation to be shared among all members of society, he supported the establishment of universal accessible public education in the United States.
I strongly believe all Americans need to live by this model. Do you?
#Coronavirus #COVID19 #StudentDebt #StudentDebtCrisis
Article written by Jett James Pruitt
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