The young in America are being forced into cruel levels of debt, and this debt is already curbing their life prospects. Its economic effects are damaging to everyone. Yet with Washington frozen, the debt burdens on the young are likely to get worse.
For the young, a college education or post-high school professional training is the equivalent of what a high school degree was a generation ago. For the nation, educating the next generation beyond high school is essential both for producing the citizens we need for a healthy democracy and for producing the work force we need for a healthy economy. And yet college costs keep soaring.
Government support for public universities and community colleges is down 25 percent since 2000. Students and their families must pay more and more of the cost. But family incomes have stagnated. The result is an explosion of student debt. It has nearly quadrupled since 2003, soaring to nearly a trillion dollars. Two-thirds of all students now graduate with debts averaging $27,000.
The poorer the family, the higher the percentage of students with debt. These debts are brutal; 12 percent are more than 90 days delinquent, but that figure is misleading because nearly one-half (47 percent) are in deferment. That means nearly 1 out of 4 working loans are delinquent. Staggeringly, over 20 percent of loans for those 30-49 — in the peak of their earning years — are more than 90 days delinquent.
Because of the force of the bank lobby, student loans can’t be discharged with bankruptcy. They cannot be refinanced. They burden students for a lifetime. The feds will even garnish your Social Security to repay them. These debts mean that the young postpone saving. They will buy a home later (if ever). They will marry later. They will accumulate far less for their retirements.
This is the down side of Gilded Age extremes in wealth. As the rich get richer, they rig the rules to avoid paying their fair share of taxes. So instead of taxing the rich and powerful, we squeeze public investment. Government cuts back on support for universities. Students and families get the bill. The result is that an entire generation racks up deep debts or forgoes needed education.
We need fair taxes to generate the income needed to make college affordable for all who merit it. We should put clear limits on the debt burden graduates must bear — and how long they must bear it. The only way this will change is if students, parents and indebted graduates make their voices heard. But all of us should demand action.Â
