SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
The Student Debt Time Bomb
Indebted students are a force to be reckoned with.
Mar 11, 2015
There's a generational time-bomb ticking -- and the student debt crisis is the trip wire.
Adults under 35 disproportionately bear the brunt of escalating inequality.
America's educated youth are graduating into an economy with stagnant wages and a torn safety net. Federal and state budget cuts, meanwhile, have spiked tuition costs and cut public services that aid young workers, such as transportation and affordable housing.
A rumble of legitimate discontent is mounting from the 40 million Americans saddled with student debt totaling $1.16 trillion -- a number expected to increase to $2 trillion by 2022. College debt now touches one in five U.S. households and exceeds total credit card indebtedness.
The most frustrated students are blocking highways over tuition hikes. Others are launching "debt strikes" by refusing to pay the for-profit schools that bilked them.
Many more are defaulting after facing the stressful realization that they can't find a job that pays enough to repay their debt. Over half of outstanding student loans are presently in deferral, delinquency, or default.
The student debt debacle has huge implications for the future. The average college graduate is now almost $30,000 underwater, with some on the hook for over $100,000.
This debt keeps young people from starting families, buying houses, and taking risks on new businesses. It also exacerbates the growing problem of wealth inequality and declining social mobility, since it gives debt-free graduates from wealthier families an enormous head start over their peers.
Many baby boomers without kids in college don't fully appreciate how the economy is tilted against the rising generation -- or how much higher education financing has changed from previous generations.
Since the 1970s, tuition rates have risen over 1,000 percent, while state funding of universities has declined by 40 percent. And the proportion of young Americans with education debt more than quadrupled, from 5 percent to 22 percent.
The powerful student loan industry lobbied for -- and got -- draconian laws that penalize student debtors more than people holding mortgages, car loans, or credit cards. Servicers can garnish young graduates' wages and disability payments to get their due.
And not even bankruptcy can cancel out these loans.
In some states, student debtors who fall into default can lose their professional certifications and even their driver's licenses. Imagine borrowing money to get a nursing or cosmetology degree, falling behind in your payments, and having your source of livelihood revoked.
It doesn't have to be this way. Other countries have offered free public higher education for decades.
In the 30 years after World War II, the government expanded access to debt-free college for millions of Americans. These included GI Bill recipients, but also millions of men and women without military service records who attended the great public universities of our land, paying a tuition bill they could afford with only a summer job.
Lawmakers should reverse the cycle of state budget cuts in higher education that shift tuition costs onto students and their cash-strapped families. Some states are considering creating "opportunity trust funds," capitalized by state estate taxes on the richest 1 percent, to finance debt-free public education.
The national Strike Debt movement calls on Congress to spend an additional $15 billion a year to make public education free. They could accomplish this by cutting out for-profit colleges and the parasitical college loan industry, and by simplifying the existing labyrinth of education subsidies.
The vast majority of college debtors still suffer in isolation, viewing their struggle as a personal problem, not a societal issue. But this is about to change. When college debt borrowers wake up and flex their political muscles, they'll be a force to be reckoned with.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
This column was distributed by OtherWords.
Chuck Collins
Chuck Collins is co-founder of CARP and author of Burned by Billionaires: How Concentrated Wealth and Power are Ruining Our Lives and Planet.
There's a generational time-bomb ticking -- and the student debt crisis is the trip wire.
Adults under 35 disproportionately bear the brunt of escalating inequality.
America's educated youth are graduating into an economy with stagnant wages and a torn safety net. Federal and state budget cuts, meanwhile, have spiked tuition costs and cut public services that aid young workers, such as transportation and affordable housing.
A rumble of legitimate discontent is mounting from the 40 million Americans saddled with student debt totaling $1.16 trillion -- a number expected to increase to $2 trillion by 2022. College debt now touches one in five U.S. households and exceeds total credit card indebtedness.
The most frustrated students are blocking highways over tuition hikes. Others are launching "debt strikes" by refusing to pay the for-profit schools that bilked them.
Many more are defaulting after facing the stressful realization that they can't find a job that pays enough to repay their debt. Over half of outstanding student loans are presently in deferral, delinquency, or default.
The student debt debacle has huge implications for the future. The average college graduate is now almost $30,000 underwater, with some on the hook for over $100,000.
This debt keeps young people from starting families, buying houses, and taking risks on new businesses. It also exacerbates the growing problem of wealth inequality and declining social mobility, since it gives debt-free graduates from wealthier families an enormous head start over their peers.
Many baby boomers without kids in college don't fully appreciate how the economy is tilted against the rising generation -- or how much higher education financing has changed from previous generations.
Since the 1970s, tuition rates have risen over 1,000 percent, while state funding of universities has declined by 40 percent. And the proportion of young Americans with education debt more than quadrupled, from 5 percent to 22 percent.
The powerful student loan industry lobbied for -- and got -- draconian laws that penalize student debtors more than people holding mortgages, car loans, or credit cards. Servicers can garnish young graduates' wages and disability payments to get their due.
And not even bankruptcy can cancel out these loans.
In some states, student debtors who fall into default can lose their professional certifications and even their driver's licenses. Imagine borrowing money to get a nursing or cosmetology degree, falling behind in your payments, and having your source of livelihood revoked.
It doesn't have to be this way. Other countries have offered free public higher education for decades.
In the 30 years after World War II, the government expanded access to debt-free college for millions of Americans. These included GI Bill recipients, but also millions of men and women without military service records who attended the great public universities of our land, paying a tuition bill they could afford with only a summer job.
Lawmakers should reverse the cycle of state budget cuts in higher education that shift tuition costs onto students and their cash-strapped families. Some states are considering creating "opportunity trust funds," capitalized by state estate taxes on the richest 1 percent, to finance debt-free public education.
The national Strike Debt movement calls on Congress to spend an additional $15 billion a year to make public education free. They could accomplish this by cutting out for-profit colleges and the parasitical college loan industry, and by simplifying the existing labyrinth of education subsidies.
The vast majority of college debtors still suffer in isolation, viewing their struggle as a personal problem, not a societal issue. But this is about to change. When college debt borrowers wake up and flex their political muscles, they'll be a force to be reckoned with.
Chuck Collins
Chuck Collins is co-founder of CARP and author of Burned by Billionaires: How Concentrated Wealth and Power are Ruining Our Lives and Planet.
There's a generational time-bomb ticking -- and the student debt crisis is the trip wire.
Adults under 35 disproportionately bear the brunt of escalating inequality.
America's educated youth are graduating into an economy with stagnant wages and a torn safety net. Federal and state budget cuts, meanwhile, have spiked tuition costs and cut public services that aid young workers, such as transportation and affordable housing.
A rumble of legitimate discontent is mounting from the 40 million Americans saddled with student debt totaling $1.16 trillion -- a number expected to increase to $2 trillion by 2022. College debt now touches one in five U.S. households and exceeds total credit card indebtedness.
The most frustrated students are blocking highways over tuition hikes. Others are launching "debt strikes" by refusing to pay the for-profit schools that bilked them.
Many more are defaulting after facing the stressful realization that they can't find a job that pays enough to repay their debt. Over half of outstanding student loans are presently in deferral, delinquency, or default.
The student debt debacle has huge implications for the future. The average college graduate is now almost $30,000 underwater, with some on the hook for over $100,000.
This debt keeps young people from starting families, buying houses, and taking risks on new businesses. It also exacerbates the growing problem of wealth inequality and declining social mobility, since it gives debt-free graduates from wealthier families an enormous head start over their peers.
Many baby boomers without kids in college don't fully appreciate how the economy is tilted against the rising generation -- or how much higher education financing has changed from previous generations.
Since the 1970s, tuition rates have risen over 1,000 percent, while state funding of universities has declined by 40 percent. And the proportion of young Americans with education debt more than quadrupled, from 5 percent to 22 percent.
The powerful student loan industry lobbied for -- and got -- draconian laws that penalize student debtors more than people holding mortgages, car loans, or credit cards. Servicers can garnish young graduates' wages and disability payments to get their due.
And not even bankruptcy can cancel out these loans.
In some states, student debtors who fall into default can lose their professional certifications and even their driver's licenses. Imagine borrowing money to get a nursing or cosmetology degree, falling behind in your payments, and having your source of livelihood revoked.
It doesn't have to be this way. Other countries have offered free public higher education for decades.
In the 30 years after World War II, the government expanded access to debt-free college for millions of Americans. These included GI Bill recipients, but also millions of men and women without military service records who attended the great public universities of our land, paying a tuition bill they could afford with only a summer job.
Lawmakers should reverse the cycle of state budget cuts in higher education that shift tuition costs onto students and their cash-strapped families. Some states are considering creating "opportunity trust funds," capitalized by state estate taxes on the richest 1 percent, to finance debt-free public education.
The national Strike Debt movement calls on Congress to spend an additional $15 billion a year to make public education free. They could accomplish this by cutting out for-profit colleges and the parasitical college loan industry, and by simplifying the existing labyrinth of education subsidies.
The vast majority of college debtors still suffer in isolation, viewing their struggle as a personal problem, not a societal issue. But this is about to change. When college debt borrowers wake up and flex their political muscles, they'll be a force to be reckoned with.
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.