Guest post from Charles Terrano
$1,004,595,916,213.00. That’s a
pretty staggering number and no, that’s not the current national deficit. It’s
actually the total amount of student loan debt as of the time of this writing. One trillion dollars. That is nearly 200
billion dollars more than the total amount of outstanding credit card debt in
America. Two-thirds of students graduate with student loans and they carry an
average of $25,000 in debt. With this record level of
debt students are graduating into the worst job market since the Great
Depression. It should be no surprise than that student loan default rates have
spiked dramatically, jumping to a record 8.8% as of 2010.
Defaulting on student loan debt can
hurt you more than defaulting on other types of debt like credit cards because
student loan debt is the hardest type of debt to get out from under. It is the
only debt type that cannot be discharged in bankruptcy. Can’t find a job? Lost
your job? Became sick of disabled? Sorry, there’s no bankruptcy option to get
away from that crushing debt…. Hope you enjoy having your pay garnished and
your bank accounts levied. As Elizabeth Warren said: “Student-loan debt collectors have power that would make a
mobster envious.” In short, we have record student loan debt, record student
unemployment, and record student loan defaults.
Oh, and just to make the
debt issue even worse…. According to an ACT study only 46% of students who start
college wind up graduating with a degree. Cost is cited as the number one
reason why so few graduate. But of course even if you don’t get a degree you still
have to pay those student loans!
To top it off we also
have an issue of unequal access. According to the National Center for Education Statistics among
those who graduated high school the college enrollment rate from low-income families was 55%, 29 percentage points
lower than the rate of high school completers from high-income families (84%). With
the latest spending (austerity) bill making it harder to qualify for
needs-based Pell Grants – you can only get the full grant if your highest
annual income was $23k or less, reduced from $30k and the maximum amount of
time you are allowed to receive grants has been reduced as well - higher
education becomes prohibitively expensive for a huge number of people.
Oh yes,
and let us not forget that in the last 30 years the average cost of higher
education has risen twice as fast as inflation. So let’s see,
record costs, record defaults, record cost increases, unequal access,
reductions in aid programs, pathetic graduation rates…. to call this a system
in crisis would be an understatement. As is typical the ones who are hurt the
most are the ones who can least afford it; the ones who are most vulnerable. It
is the students who suffer while the schools make money hand over fist.
According to the Office of Senator Tom Harkin (D-Iowa), one of the loudest
voices in Congress against the for-profit school system, the for-profit schools
enjoy a profit margin of 30-40%, that makes the for-profit college industry
one of the most profitable industries in the country! As is the norm for our
market-driven capitalist system the industry makes money without caring about
the human cost of their practices.
As
Socialists we reject the debt driven higher education system that harms the
poor while further enriching the wealthy. We call for tuition free
higher-education for all. Higher education should be funded 100% by tax revenue
ensuring that every single American who wants to go on to college can without
concern about cost or debt. If a student is smart enough to get into Harvard
and that’s where they want to go they should be able to do just that
irrespective of whether that person is the child of a multi-billion dollar CEO
or a welfare recipient from the inner city. Intelligence, not money, should be
the sole determining factor for what colleges and universities a student can go
to.
A
system of public higher education can work quite well. We know this because
there are several countries that currently do offer 100% tuition free higher
education. As an example Denmark offers education straight through the graduate
level 100% free to anyone who a
Denmark Citizen, permanent resident, or from anywhere in the EU or Switzerland.
Denmark even goes one step further, a student will receive a stipend, called SU, from the government to cover cost of living
while they are in school. Denmark believes that paying students while they are
in school is important to ensure that the students can focus on their studies
as opposed to trying to pay the rent. Most importantly, free education does not
mean substandard education. Denmark ranks fifth in the world overall for quality of higher
education and several of its universities rank among the world’s best.
Free
high quality education for all plus a stipend for living expenses, this is a
model that we need to emulate here in America. This would allow everybody true
equal access to higher education. This would allow students to focus on their
studies without having to worry about how they are going to pay for it. This
will allow students to go to whatever school they qualify for, not just
whatever school they can afford. This will allow students to get out from under
the onerous burden of student loan debt. This will ultimately help the entire
country. We call upon our government to end the unjust debt-driven higher
education system and replace it with a fair 100% tuition free system funded by
tax dollars. People are the most precious resource that we as a country possess.
We should invest in those people; not exploit them.
(Sorry some of the text looks kind of highlighted-looking. I can't figure out how to make that go away. --JB)
