Our view: student debt crisis must be addressed
College students today face a variety of challenges, but none is more serious than the mounting student debt crisis that is putting financial pressure on millions of young people.
Currently American college graduates of all ages owe $1.45 trillion in debt collectively, according to the Federal Reserve. This amount is higher than the total national credit card debt and grows every year. University tuition and fees cost roughly three times more than they did in the 1970s, according to a study conducted by the College Board. Access to a college education is open to more students than it was fifty years ago, but it’s also much more expensive.
There are many possible federal programs that could help ease the burden of student debt, including sensible and market-friendly solutions.
One possible debt-relief program would allow struggling graduates to pay back a percentage of their income rather than an amount they may not able to afford. After ten years, whatever debt they have left is paid for by the government. Many students end up making less money than they thought they would after college, and this would prevent them from being crushed by undue financial burden.
Pell grants, which are means-tested transfers to low-income students that don’t have to be paid back, should be expanded to provide greater aid directly to those who need it most. These awards should be indexed to inflation as well, to prevent their benefit from being diluted over time.
In addition, community college should be made tuition-free through a government program. This would effectively allow students to finish half of a college degree without incurring debt, and it would make two-year programs and trade school free for people pursuing blue collar careers.
Some people may have concerns about the cost to taxpayers and the federal government that programs to aid those with student debt would have. This is fair, though there are ways to finance government programs from methods other than income tax. A tax on financial speculation would provide ample money for the programs we’ve suggested here, and this would not affect the vast majority of Americans who do not trade on the stock market.
Giving debt-laden graduates relief would also act as an economic stimulus. Now, instead of spending hundreds of dollars a month paying back their loans, students would have the opportunity to put that money back into the economy, which would create new jobs.
Commentators who write about student debt frequently put the blame on college students for their own struggles. Had graduates with debt made better financial decisions or chose a major that was more economically fruitful, they argue, they wouldn’t face difficulty with student loans. No one is in favor of financial irresponsibility, but who among us made perfect decisions when they were seventeen? This is a systemic issue that goes beyond the sum of individual behavior.
Millennials are not the only group to be affected by student debt, but they carry most of its burden. Many young people are unable to afford houses and are wary of starting families because they are paying back massive school loans. Access to durable goods like property is part of the foundation of the American middle class. This opportunity is slipping away from our generation.
When our parents went to college, it was possible for them to paint houses and mow lawns over the summer and save up enough money to pay for school. Despite what crotchety talking heads might say, young people in 2017 are working hard, but we’re struggling to get by. Millennials ought to be able to have at least the same opportunities as their parents. Something must be done about the crisis of student loan debt, and this editorial board believes that young people are worth the investment.
Our View represents the consensus of the CW Editorial Board.