You may or may not know that in the United States, you must pay for tuition and housing up front in order to attend a university. This means that you either are very rich, have a great story for a nice scholarship, or you take out loans. (Or maybe two of the three. I don’t judge.) I was lucky enough to have the scholarship for my undergraduate degree, but my graduate degree was financed entirely through scholarships and loans. I even got one of the largest tuition scholarships offered at my institution that year (I’m a smartypants), but in order to afford the remaining tuition and life in Chicago, I had to take out about $90,000 in student loans at between 3.0% and 7.9%. There is no way out of this debt other than death. Or total incapacitation, but sometimes even that’s not enough. And let’s be clear: I did not take ANY private loans, which are even more difficult to pay back. All of my loans were disbursed by the federal government.
Thank God for the Income Based Repayment plan, which I have to recertify every year and which allows me to pay back my student loans based on the money I am making at work. Having just gotten my recertification letter, I have been informed that all of my loans should be paid off in 2025. By that time, I should have my “American Way Approved” home, white picket fence, and 2.5 children. I could literally have a third grader before my loans are paid off. My puppy will be old and lazy by the time I am free of student loan debt.
All that having been said, here are two things I have realized about student loans:
1. Higher education and the resulting loans are creating an American oligarchy. Because only the very rich or very lucky can afford to go to college debt-free, everyone else has to take out large sums of money to pay for an education that has become necessary to obtain just about any job in the United States. Because obtaining that money is so easy, colleges and universities raise their tuitions to make more money. Thus requiring students to take out more loans. In the end, the only people who can actually afford to go to college, never mind obtain a graduate degree, are the very wealthy. Or the children of the very wealthy. Thus, they obtain higher-paying jobs, and because they don’t have the loans to pay off, are able to accrue wealth more rapidly, eventually perpetuating the whole circle. (And, of course, with the latest Supreme Court rulings, they’ll also control politics, so there goes all the need for the rest of us to learn things! The rich will just make our decisions anyway!)
2. You want economic stimulus? I’ve got economic stimulus in spades! It’s just all going to the loan repayment service that owns my soul. I pay approximately $550 per month to my loan servicer. That is a mortgage payment on a home priced between $90,000 and $100,000. It is most of the money I would otherwise spend on consumer goods or a vacation somewhere. Why can’t we get out of this cycle of nationwide economic depression? Because we have a whole generation (or two) of people who are trying to pay off the education that they got to be able to get a job to participate in the depressed economy. This cycle will continue until some kind of loan reform is achieved.
I’m not saying that we need to “forgive all debt” now. There needs to be some level of accountability for what has taken place on all sides. But to tell everyone that education is necessary and then make that education impossible to live with for the rest of your life seems a little unfair to me. We need not only financial reform, but we also need to teach young people how money works, and we need educational institutions that cease acting like corporations.
Until then, I’ll be looking at my student loan bills and telling my biological clock to shut up. I decided that I should be allowed to use my brain, so I will hereby be foregoing my white picket fence. I just wish I had known that was the choice I was making when I made it.