Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

End Student Debt!

 by The Nation

The student loan crisis finally reached center stage in Washington after the House GOP budget called for letting interest rates double on government-subsidized loans (and for deep cuts in Pell grants and other student support). If it passes, students who borrow the maximum will end up paying as much as $1,000 a year in added interest. President Obama sensibly called for extending the lower rate, stumping at colleges and on talk-shows to enlist students and others in the cause.

Republican leaders quickly realized the perils of angering young voters. In another flip-flop, Mitt Romney decided to support extending the lower rate, while the House GOP passed an extension but taunted the president by stipulating that it be paid for with money taken from the preventive health fund created by the Affordable Care Act. Senate Democrats propose paying for it by closing a loophole that doctors, lawyers and small businesses use to avoid payroll taxes.

Ignored in the standoff is that even at the lower rates, more and more students can’t afford the college education or advanced training everyone but Rick Santorum believes they need. Since 1982 the cost of living has doubled and healthcare costs have tripled; college tuition and fees have exploded more than four times. All this comes amid revelations about the hundreds of billions in loans—at below-market rates—ladled out to the banks by the Federal Reserve and Treasury during the financial crisis.

The student loan crisis has had two effects. The United States, once the leader in the percentage of college graduates age 25 to 34, has dropped to sixteenth among thirty-six developed nations, with more and more students dropping out because they can’t afford the rising costs. The second effect is ruinous debt: the average indebted college graduate is $25,000 in hock. Total student debt exceeds $1 trillion—now greater than credit card debt. And student debt is inescapable. Bankruptcy rarely extinguishes it; even Social Security payments can be garnished in case of delinquency.

These debts weigh down the entire economy. Many students are forced to move back in with their parents after graduation, which depresses the housing market. Public interest work is less affordable; as Pam Brown of the Occupy Student Debt Campaign puts it, “The debt makes us very individual; we can’t afford to help someone else.” Now more than half of college graduates under 25 can’t find full-time work, and wages for recent graduates are lower than they were in 2000. Not surprisingly, delinquencies—and the fines and penalties that follow—are rising.

It is long past time for reform. Representative Hansen Clarke introduced a bill that would forgive up to $45,520 in student debt after a borrower makes ten years of payments at 10 percent of income. The Occupy Student Debt Campaign is calling for a write-off of existing debt as well as free public higher education. Students in California are pushing an initiative that would make four years of state university free for all full-time, in-state students who maintain at least a 2.7 GPA or do seventy hours of community service a year. Lost tuition would be paid for with a modest surtax on those earning more than $250,000.

Making public college (or advanced training) free for those who merit it isn’t a radical idea. For many years the United States led the world in free K–12 education. The GI Bill paid for college or advanced training for a generation of vets after World War II, which gave us the best-educated citizenry in the world and broadened the middle class. As recently as 1980, Pell grants covered 69 percent of public college costs; now they cover less than 35 percent.

We can easily afford the estimated $30 billion annual cost of free college education; a financial-transactions tax would raise many times that sum, and it would inhibit destabilizing speculation on Wall Street. We would reap the benefits of a better-educated citizenry, and young people could be more entrepreneurial and more public-spirited.

But Washington is too paralyzed by the elite fixation on austerity and too polarized by partisan divides to consider anything this bold. The Occupy Student Debt Campaign is right: reform will come only from outside the Beltway, when students, parents and those who understand how student debt weighs down our economy come together to demand it.


© 2017 The Nation

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Store Walkout Over Firing of Starbucks Union Organizer Racks Up 20 Million Views on TikTok

"Starbucks continues its rampant firing of union leaders."

Jake Johnson ·


70% of Americans Support Deciding State Abortion Rights by Ballot Measure: Poll

After an "enormous victory" in Kansas, some progressives argue that ballot measures "are the next frontier" for protecting access to reproductive healthcare.

Jessica Corbett ·


Judge Rules Walgreens 'Substantially Contributed' to San Francisco Opioid Crisis

"Walgreens knew its system to detect and stop suspicious orders was nonexistent but continued to ship opioids at an alarming pace to increase profits," said an attorney for the California city.

Brett Wilkins ·


Historic Climate Bill, Say Clear-Eyed Critics, Still 'Pours Gasoline on the Flames'

"This was a backdoor take-it-or-leave-it deal between a coal baron and Democratic leaders in which any opposition from lawmakers or frontline communities was quashed," said one activist.

Jessica Corbett ·


Doctors Against Oz Launch Campaign Denouncing GOP Candidate as 'Quack'

"ShamWow guy + stethoscope = Dr. Oz," said John Fetterman, the Democratic U.S. Senate candidate in Pennsylvania.

Julia Conley ·

Common Dreams Logo