25 years ago at the end of this month, Steve and I exchanged rings and vows in a little church in Tenafly, NJ. That day, we were joined in hearts and souls and student loans debt. Together, we combined my $30K of loans with his $45K, and we started our new lives together with a $75,000 shackle around our ankles.
How did we accumulate all that debt? Well, both of us had some debt from undergrad years. Then, we both got terminal MAs; mine was in social science at the University of Chicago, his masters degree was in history at Cleveland State University. Back then, people were still getting masters degrees in the humanities, just because nobody told them it was a bad idea.
Then, we got our PhDs at a university that did not fully fund its students. On top of a full course load, we taught classes all over the city for the city university system earning less than minimum wage. I also had a part-time job in semi-exploitive policy center at the university. Even with all that hassle, there was no way that we could pay for our slum apartments and tuition without loans. We just signed the paperwork and got the checks.
Read more at my newsletter, Apt. 11D
Apt. 11d 
“But our graduate institution certainly knew that they were preparing students for jobs that didn’t exist. Why did they continue to operate such a pointless program? The faculty loved teaching grad students, rather than over-flowing introductory classes with unprepared freshman. There was no incentive to shutdown a university program that made the faculty happy and brought in tuition money from gullible grad students.”
Bob Dylan: “Now, a very great man once said
That some people rob you with a fountain pen
It didn’t take too long to find out
Just what he was talkin’ about
A lot of people don’t have much food on their table
But they got a lot of forks ‘n’ knives
And they gotta cut somethin'”
Upton Sinclair, HE said: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”
Happy faculty making a living doing something the students (sometimes, between high-stress evaluation events and eating ramen for fifteen days straight) enjoy. Reports from the front lines of after-U life from guys driving Uber can easily be discounted. And, faculty are surrounded by people for whom the whole thing has worked.
I have had the unusual trajectory of attending a junior college, a lower-tier state college, our state’s flagship, and an Ivy. Suze Orman was not yet prancing around on stages proclaiming “College debt is GOOD debt!” – the financial advisor of the time was the far more sensible Sylvia Porter – but the received wisdom was that college was the path to the upper middle class (largely true then and now) and that following that path would guarantee you entry to the UMC (MUCH less reliable! and worked far less well for my fellow students at lower-tier state college than it did for my fellows at Flagship U or in the Ivies).
So on the student debt issue: an awful lot of people have been sold a bill of goods, and are now NOT going to make the kind of escape you, Laura, and the mister have made. Living with roommates in your thirties facing six figure college debt and working a five figure job leads to a sour outlook. You will likely not be able to get a vine covered cottage or a spouse n kids. These people have been screwed. One question is should they get rescued by the government? And another is how to stanch the bleeding of more and more students going into the mill in future to squander their and their parents’ financial future in pursuit of a dream most won’t attain.
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I’m not in the American system but it seems to me that by making educational debt non-dischargeable in a bankruptcy (which is my understanding), it’s like the government has bailed out the banks. I understand the root issue because otherwise you would have huge inequities in who can qualify for an educational loan but…it seems to me that’s kind of the spot where the issue lies. Student debt does not behave like other debt.
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It bails out lenders (though in some cases, the lender is the government), but it also bails out universities, which are the ones who get the money (at least the money that is allocated to tuition, fees (and room & board, if they provide housing).
I think that there are students who were exploited by the system that we’ve had in place. I found a timeline — and I date the beginning of the “exploitation” to 1992 when unsubsidized Stafford loans were developed. Those loans accumulated interest while students were in schoo and were unsubisidzed, presuming that the loans were a personal investment that would pay off directly for students. And then, further exacerbation of the problem with a 2005 change that allowed grad students to take PLUS loans. Hey, when Dave and I agree, it seems like there *should* be a way forward,, shouldn’t there? and, that there doesn’t seem to be is a failure of the politics of our time?
I have ambivalence about student debt relief that is not accompanied by a change in the system because I think that debt relief with no other changes might indeed just feed the mill. But, I think a difference between me and others who might state ambivalence is that I would probably rescue those people and try to fix the system later.
The McDonald’s budget is my reference for a hopeless life: https://www.forbes.com/sites/laurashin/2013/07/18/why-mcdonalds-employee-budget-has-everyone-up-in-arms/
The attention paid to the student debt shows a difference in political power, but, also, I think the idea that there’s a solution simpler than fixing our entire economy. With those 30 year old teachers sharing apartments, the idea is that if their debt is erased, they can be back on a viable economic path, saving for the future, and hope for some joy. And, that their path is part of the solution to the McDonald’s budget, too, that McDonalds jobs aren’t the career future, but a transition.
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My undergraduate program (The Western College Program) at Miami U – in case your husband remembers it – was very much geared towards students going on in academia. The main thing that stopped me was coming out as LGBT and needing, in the late 80s, to have control over where I lived. Even then, it was acknowledged that you would need to follow the jobs that were already hard to find, and in 1988 there were plenty of areas where I didn’t feel safe living.
I do remember considering graduate school in the humanities and finding a book in a local store that said that all the retirees would be creating jobs in academia. Ha! I’m glad I didn’t pursue it, but a number of my classmates did and only one got an academic job. The rest transitioned into university administration or the tech industry. A few are SAHPs.
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OK, so what fixes
“First, Students should have caps on the amount of student loan money they can borrow. They should have $40K limits, unless they attend a medical, law, or business school.”
I agree that there should be a cap on debt. I wouldn’t remove that cap for the medical/law/business schools as a class. Yes, you should borrow money to go to Harvard Med/Law/MBA if you are admitted (and, that’s true for a broader range of schools); but it is not true for every school that offers those degrees. And the availability of our debt financing encourages means lower ranked schools benefit from selling less secure products to their students. MDs are still a pretty protected guild, but not so for ODs, law or MBA degrees.
Schools have to have some consequences for the results of their debt financing — the entire burden cannot be imposed on the students. True that we want schools to still offer educations to poor students, but the results for their students can’t be consequence free for the school while imposing significant burden for the student. One solution is more government financing for those schools and I agree that we should find it for community colleges, while still thoughtfully assessing their programs. There will be waste, but the burden of that waste will be imposed on all of us and not the poor students.
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Also, we need to address the issue that students are taking on student debt not just to pay for school but to pay for living expenses. Like grade inflation during the Vietnam war, schools than have incentives to help the student, in the short term, by running “degree mill” programs in which the individuals do not gain skills, take on debt, but, at least manage to pay the rent and stay off the street.
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Yes, using student loans to live on is a problem. You get some students who just take out loans they don’t really need while taking a few community college classes and then ending up with a big debt they default on. More often I think a lot of students just can’t pay rent or buy food on part time jobs and have to use loans to make up the difference. (See food insecurity among college students). We need some kind of non loan aid to support students living expenses. That’s tough as it gets into taxable aid, but there should be some kind of creative solution.
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I’ll add that low-income students not infrequently wind up with their families living off of their loans, because from the family’s point of view, it’s free money, and it would be selfish of the student not to share.
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