Thursday, September 15, 2011

Student loan debt: My first political rant

(Tried to cram this into a Facebook status update, and it didn't quite fit.)

I've never considered myself a particularly political person. I don't aspire to be so, either, as I find politics generally dirty and upsetting to my otherwise (and preferred) rosy view of humanity. I've only tagged one post with "politics" in my blog before, ever. By nature, I err on the side of conflict avoidance, so political sparring just hasn't ever held much appeal for me. With that said, I finally feel too intensely about something to keep my mouth shut about it - and I look forward to hearing your ideas in response, especially if you disagree with me.

So. Michigan congressman Hansen Clarke is proposing a bill to forgive all student loan debt in our country.


As the initial spark of "WOW, THAT WOULD BE AWESOME!" fades, I'm left feeling appalled that anyone, let alone the 160,000+ people and counting who signed this petition today, can think this is a decent idea. (On a sidenote, I find it curious that this petition website ups its number of signatures it "needs" every time it hits its the moment, it "needs 165,000", but I'm sure by the time most of you read this, it will undoubtedly be higher.)

So yes, the proposal sounds great in theory, at first glance. I have student loan debts I'd surely enjoy seeing magically erased as much as the next person. If the government bailed out Wall Street, why not "College Street" too? After all, isn't it better to invest in the bright, innovative, hard-working minds of tomorrow than in greedy, corporate, bureaucratic schmucks?

This idea was proposed two years ago, too, and with it came a barrage of supporters. Genuinely depressing stories emerged, of people who felt they'd worked incredibly hard to earn their college educations, only to be faced with a dismal job market and the inability to keep up with soaring interest rates on their loans. Yes, the interest rates are often outrageous, and much like with the housing/mortgage crisis, not enough understanding conveyed of the risks involved in saddling oneself with five- or even six-digit debt. I have great sympathy for those who have studied and worked hard for their degrees, yet are now struggling to stay afloat because of their debt burden.

However. What about the thousands of others who aren't in the same situation, for better or worse? What about parents, or even young students themselves, who worked extraordinarily hard to put money in a college fund to avoid having to ever go in debt to fund their education? What message does universal-debt-forgiveness send them? "Haha, suckers, way to work your ass off for 20 years for nothing!"

It's a bit like telling all the Ferrari and Lamborghini owners in the world, "Hey, we realized that what we charged you for these cars was unreasonable, so we're going to refund all your money to you. Oh, where are we finding the money? So glad you asked! Well, since the Honda and Toyota owners didn't spend as much as you did, we feel they can all pitch in for your fancy-car-reimbursement plan."

What about people who didn't even go to college because they opted to enter the workforce after high school instead? The educated elite can argue all they want for labeling such a situation a tragedy, but to do so by default steals agency from anyone who made that decision with intention. Steve Jobs, for one, understood that college is not necessarily the ticket to success, and didn't feel the exorbitant tuition rates were worth his while. While college is undoubtedly a tremendous privilege and life-changing experience, it is not the end all, be all - and is certainly even less so at the tune of $200,000 of debt, which a mere bachelor's degree these days offers no guarantee of allaying.

So what about people, you ask, for whom not being able to afford college was a disappointing reality, and not a choice? By which I mean, those who were qualified - who perhaps were even accepted at elite schools - but didn't have the financial means to go at the time. Yes, this is sad. But isn't suddenly making free the education of those of us who DID have the privilege to go a slap in the face to those who didn't? "Oh, if only you'd been born into a family with the wherewithal to take on mounds of debt on your behalf, you too could have had an elite education, for free eventually...but, too late now."

What about people who did take out loans to attend school, and have worked hard for 5, 10, 20 or more years to pay their loans off already? Is this not a slap in the face to them as well, for all their efforts to make good on their promises to repay what was once borrowed?

In the meantime, if this bill were to become a reality, would the promise of it on the horizon not diminish incentives to be fiscally responsible for those of us currently saddled with student loan debt? Let's offer a dozen people full-time jobs, but qualify the offer with "Or you can just hang out for a year and not work, and we'll still give you a year's salary at the end of it." I can guess which option most people are likely to opt for in that scenario, and it's not the one most likely to get our economy churning again.

Most of all, where does the money come from to bail out the debt-strapped graduates? Money doesn't just grow on trees, I'm sure you've heard. The government is already trillions of dollars in debt, so if it's the government that's expected to pick up the tab, it's really not forgiving anyone's debt - it's just transferring it. To whom? (1) Taxpayers, who as far as I'm aware, are the exact same people this would supposedly "bail out", and (2) Future generations. Great job, America. So many of my peers who spent their voices in college railing against the irresponsible spending of our predecessors are now pouncing with glee on the notion of doing the very same thing - denying responsibility for incurred debts because they seem unfair - so someone else has to deal with them instead.

Wake up and smell the hypocrisy, please!

Lastly, even if this bill ever passed, then what? Is college just "free" from now on? Or is it just students who graduated in 2011 or earlier that get a retroactively free ride, and from now on, everyone will be expected to pay exorbitant tuition rates again?

I'm not saying that the economy, higher education system and entire institution of student loans aren't broken. I think they are. But the solution is not to absolve young people of financial responsibility in their own lives. The solution is not to teach an entire generation that if, oops, they made the decision to invest in something that didn't pay off the way they thought it would, that the government will take care of everything.

Of course, I'm still enough of a liberal at heart to believe that government, despite its disappointing performance for most of my life so far, can be a positive force in its citizens' lives. I would like to see the government concern itself not with forgiving all debt, but with helping prevent the kind of sky-rocketing interest rates that have indeed destroyed lives - and that goes not only for student loan debts, but for home loans and mortgages, credit card companies, etc. Nevertheless, to blame the banks and loan companies entirely is to ignore underlying, problematic societal attitudes, and the need for a shift in our collective thinking about money, education and the wealth of our society.

I'd like to see the government - society as a whole, really - take more responsibility for the financial education of our youth, particularly as they approach college age and face huge decisions that will affect the rest of their lives. As thousands of petition signers have demonstrated today, the "Go into as much debt as you need to to attend the school you want" model is not working out for most Americans anymore. Families are pouring millions of dollars they don't have into the "investment" of higher education, which simply isn't producing the same ROI that it did for the baby boomer generation. The solution, however, cannot be a soothing Band-Aid for the nation's educated albeit disillusioned twenty-somethings. Rather, I think we need a broader examination of the real problem at hand - our society's misunderstanding of, and subsequently dysfunctional relationship, with debt.

End rant.


  1. Very very well-said, Yitka! I hadn't heard of the bill proposal, but yes, it sounds entirely too hypocritical (this coming from another person who would in theory like his debt magically erased). Everyone is responsible for the decisions they make, and the truth is we decided to go to an expensive college, so we should be forced to deal with those repercussions! A great college to be sure, but expensive nonetheless! I see a political career in the making...

  2. As someone who is thousands upon thousands of dollars in debt for college AND the grad school, I have to say I agree with you. That money is going to have to come from somewhere, and if there's already talk about "not enough money" to aid social welfare programs then there is certainly not enough money to grant loan forgiveness to Mr.-Takes-Out-Loans-To-Be-A-Painting-Major-And-Now-Can't-Find-A-Job. :p

    And I think you make a good point- giving money to a subset of in-debt college graduates now completely undermines the efforts of students and parents everywhere who worked their asses off to be fiscally responsible.

    Come to think of it, there's a whole message of "responsibility" that our government (as well as our U.S. population as a whole) just doesn't seem to be grasping. Grumble grumble.

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  4. Wow. Well said Yitka! Much more articulate and reasoned than I could have managed! Now, Society, I want 'reparations' for my student loans that I paid off in... 1982!