Denver Post/June 2015
By Alex Miller
Like many bad things, student debt has taken a little while to make a mark on our collective consciousness. Sometimes it just takes a magic number — like $1 trillion — to really get the conversation going.
Actually, the number is $1.2 trillion, and counting. I have a hard time getting my head around what one thousand two hundred billions of dollars means or looks like, much less how we managed to incur all that without the words “Middle East” involved. But in our home, we feel it every day as our children graduate college and talk as much about their hopes for the future as they do how to rid themselves of their onerous debt as quickly as possibly.
They’re not alone. In 2013, 67 percent of college grads entered the workforce with some amount of student debt. In Colorado that same year, the average resident student graduated with $22,100 in debt. Our oldest son, who graduated from CU-Boulder in 2014, had two scholarships worth $5,000 a year, and he still walked out with 30 grand in loan debt.
When I started my freshman year at Boulder in 1982, tuition was $868 a year. This year, it’s $9,312 for an undergrad resident. States have slashed what they contribute to higher ed, while universities have added layer upon layer of administration over the years. Our education system, the finest in the world, we’re told, appears to have no system at all when it comes to managing how students should reasonably be expected to pay. Like a driverless car careening down a vaguely defined road, the institutions that serve as our storehouse of knowledge and training ground of our youth operate as an ad hoc collective churning out a debtor’s misery with two out of every three diplomas.
Of course, many schools deliver good educations, and many jobs require them. But the baseline expectation that the typical 18-year-old, eager to start school and willing to sign anything, is capable of long-term, rationale decisions about cost-benefit ratios, loan amortization and debt service is tough to swallow.
Whatever our schools’ culpability in all this, the other big player is the United States Government, which earns tens of billions a year in interest on student loans. Unlike most other kinds of debt, federal student loans can almost never be discharged through bankruptcy, and they will literally follow you to your grave: If you haven’t paid them off by the time you retire, Uncle Sam will ding your Social Security payments. This is an under-reported phenomenon and one that will grow more alarming as the holders of our massive debt grow older.
It’s easy to see why populist messages from the likes of Elizabeth Warren and Bernie Sanders are starting to resonate. All this student debt is an enormous drag on the economy, and Republicans who killed Warren’s student loan reform bill last year may soon find their constituents looking for relief regardless of how well it plays on Fox News. Warren’s bill would have allowed students to refinance at lower rates — a common-sense measure that could only be killed by those for whom no amount of middle-class suffering is ever enough to tick up taxes on the rich.
As Sanders has pointed out, even a miniscule transaction tax at the Wall Street casino would be enough to fund a public college education for every American who wants one. That, combined with a lowering of the interest rate on new loans and the ability to finance older ones, would have an enormously beneficial impact on the economy — not to mention the emotional and financial well-being of college grads and their families.
As one of the most educated states, Colorado has a lot at stake in how we treat our students, ourselves, and whether we think starting our careers mired in debt is a great idea or something that should be changed. The solutions aren’t clear, but the starting point is: We need to make a lot of noise about what is truly a crisis and make student debt reform a major issue in 2016.
Alex Miller is a marketing writer who lives in Highlands Ranch.