Earlier this week, US Senator and Democratic presidential candidate Elizabeth Warren announced a policy plan that would wipe out most college debt in the US. Specifically, her plans would eliminate at least a portion of up to 95 per cent of American student loan-holders’ debt — and create universal free college by establishing a two per cent wealth tax on the richest Americans.
It didn't take long for some people who had already paid off their loans to cry, “No fair!”
One opinion piece titled “Elizabeth Warren's plan to cancel student loan debt would be a slap in the face to all those who struggled to pay off their loans” resulted in myriad sarcastic subtweets, like, “Free pizza in the HuffPost DC office today. What a slap in the face to those of us who have already eaten,” and “Child labor regulations a slap in the face to children who worked in coal mines.” The subtweets called out the self-centered, mean-spirited “by-the-bootstraps” mentality that appeared to power that headline, and as someone who went into student loan debt and paid it off via going into more debt, I'm here for those callouts. Even though my student loans are currently rolled into a 30-year mortgage and thus I wouldn't personally benefit from student debt elimination, I still don't want everyone else to suffer financially just because I had to.
I learned early to be afraid of debt. My parents instilled in me the importance of not acquiring debt of any kind (including student loan debt), which meant that when I started looking at schools in the early 1990's, I became immediately overwhelmed. I could apply for financial aid, but the advisor informed me I'd still require loans for the majority of the balance. I didn't know what to do so I just simply gave up and began looking for full-time jobs instead.
That was decades ago, when the student debt burden wasn't even remotely close to what it is today.
Between 1987 and 2016, the average price of an undergrad degree has increased by 161 per cent, while salaries have remained mostly stagnant. Thirty years ago, a part-time, minimum-wage job could more than cover a student's tuition at a public university. Today, that same job would only cover 68 per cent of tuition, not to mention any other necessary living expenses. And the gap is only growing. Based on annal tuition increases of 4.9 per cent annually for 20 years, by 2037, the average cost of an undergrad degree in the US is projected to be greater than $240,000.
I didn't end up attending college until I was in my mid-twenties, when my place of employment offered tuition reimbursement as a benefit. I took only as many classes as they'd pay for at a time and I quit school when I got pregnant. I went back to school about a decade later, post-divorce, with two small children, and very poor.
After a single year, attending only part-time, I had accumulated $10,000 in loans. As a single parent just getting back on my feet, this was immediately crushing. I couldn't pay it or even a portion of it. I deferred and deferred and my balance went up and up. Years later, my new spouse and I consolidated our student debt into our mortgage. It was a trade-off – a smaller interest rate for a lengthier payment plan and a reduction in our home's equity. It also meant losing the ability to ever access any kind of loan forgiveness program.
My spouse and I aren't alone in feeling overwhelmed by student debt. According to research, most college graduates don't expect to pay off their student loans until they are in their forties. Studies back up that expectation, showing that student debt can take 20 years or more to repay and those lengthy student loan burdens affect people well beyond middle age. Recent college grads may have to delay retirement until their mid-seventies in part because of student debt.
My two teenagers are among the most fortunate American students: they attend a school district that offers college tuition scholarships through a philanthropy program. There are only a couple of dozen of similar programs in districts across the country.
When my kids graduate, they'll be able to choose from any public and most private colleges in the state, and attend tuition-free. As it stands, almost no Gen Z-ers will benefit from tuition-free college, but I certainly wish that everyone had the same kind of access to affordable formal education. We need more level playing fields, not fewer.
It's a great exercise to reflect on our own experiences – we should recall not just what successes some of us have had in eliminating our own debt, but also examine what privileges might have accompanied our abilities to meet that objective. We should also remember how difficult living under the burden of student debt is and that many people are struggling to pay their loans or forgoing a college education at all because of that looming threat.
Elizabeth Warren has spelled out a very specific plan that would offer not only debt relief but free college education. Instead of groaning, “No fair,” we should be throwing all the life rafts at this effort.
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