Student-Loan Debt—Who Cares Most?

During this campaign season, so far, we’ve seen extreme views on higher education, from Rick Santorum’s accusation that the president is a “snob” for advocating that everyone in America should go to college, to Obama’s actual position, that every American should be educated for at least one year beyond high school and that the U.S. should retake the lead in per capita college graduates by 2020. Santorum’s position is clearly part of his attempt to revive the culture wars of the late 1980s. Obama’s plan still strikes me, though, as inscrutable. Why the race to take the lead in college graduates, announced without rationale, as if graduating for graduating’s sake were inherently worth something? One could offer a rationale that our country needs more college graduates to compete in the global high-skills/high-tech economy, but a recent post by Peter Wood here in Innovations thoroughly debunks that argument. Meanwhile, although many community colleges offer such programs, the U.S. does not have a coordinated apprentice program to train auto mechanics, electricians, plumbers, etc.—vital everyday, hands-on technicians who are (at least in my experience) usually part of family businesses and whose skills are vetted by word of mouth or by such services as Angie’s List. Politicians pay a lot of lip service to improving the country’s infrastructure, but we could do a lot better by reforming our education system in more comprehensive ways.

Then there’s the whole “one year beyond high school” exhortation. Exactly what does one do with one year of college? Though I can’t read the president’s mind, my hunch is that he’s thinking “If you go to college for one year you’ll want to stay for three more.” That brings me to my central concern: if a college diploma is now necessary, it ought to be free, just as K-12 education is. But it’s not; it’s financed primarily through student debt, and student-loan debt has now reached crisis proportions. Admittedly, the Obama administration has made efforts to curb that problem, but in my view they’re timid and belated. Secretary of Education Arne Duncan has outlined and promoted the Know Before You Owe plan, which would cap monthly student loan payments at 10 to 15 percent of the graduate’s income. But there’s no guarantee that the plan will go anywhere since Sallie Mae and the student-loan lobby are willing to pay millions to kill any move to turn it into legislation.

Also, ironically, the title of the plan, Know Before You Owe, is misinformed, since no one knows the consequences of student debt more clearly and palpably than students themselves. The lead article in the March 1, 2012 issue of Ohio State’s student newspaper, The Lantern, by Sarah Steman, titled “Could Student Loans Create the Next ‘Debt Bomb’?” makes that point very powerfully. Meticulously researched and poignantly written, the article mixes statistical details with student interviews to expose debt as the issue front and center on the minds of undergrads. Steman notes that students at public universities are just as (if not more) in danger of defaulting on their loans than students at elite private universities.  The average student-loan debt of Ohio’s college graduates is currently nearly $28,000, and the default rate is 8.2 percent.

She also interviews recent graduates. One, a communications major, graduated with $26,000 in student debt, and despite the fact that he has a job, he lives with his parents and admits, “If I didn’t have that, I’m not sure how I would get by. I feel for those people who are paying off their loans and have to pay other bills too.” She also relates the story of a student whose parents are slowly being drawn into bankruptcy because they co-signed their daughter’s student loans and now, on social security, find making the payments challenging. (Sallie Mae encourages co-signing—most commonly by parents—to reduce the chances of defaults). Stemen makes a great case that the current student-loan system is a house of cards that is ready to collapse, and moreover, that students are fully aware of its fragility.

We need to remember that students, not faculty and certainly not administrators are the shapers of American higher education. If they lose faith in any central aspect of our universities—what is taught in them, whether what is taught will help them gain employment and, most urgently, whether going to college at all is worth the money—they have the numbers to change the institution in which we all function.

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