Student loan debt? Take to the sea! Or, here’s an equally shaky plan:
Outstanding student debt in the U.S. has tripled over the last decade and is projected to swell to $2 trillion by 2022. Average debt at graduation is currently around $30,000, up from an inflation-adjusted $16,000 in the early 1990s. Meanwhile, salaries for new bachelor degree recipients, also accounting for inflation, have remained almost flat over the last few decades.
Haag’s student loan balance of around $20,000 isn’t as large as the burden shouldered by many other borrowers, but, he said, his difficultly finding a college-level job in the U.S. has made that debt oppressive nonetheless.
“If you’re not making a living wage,” he said, ”$20,000 in debt is devastating.”
OK, disclaimer: I also live abroad, but my move wasn’t related to student debt. But I get it, and I bet you do too. Statistically, if you’re American, went to college, and you’re younger than, I don’t know, 40? 50? 100? then there’s a good chance you or people you know have been hauling around student loan debt for years, like an albatross with a Bachelor’s degree. Citation needed? How’s this:
She still owes nearly $40,000. Galante is one of more than 3 million people over 60 still paying off college loans. Like her, many went back to improve their job prospects, while others are paying off loans for their kids or grandkids’ education.
“I was very confident that … I would pay it back, you know, in due time,” Galante said. “We grow older and then we get more senior. That’s reality of life.”
Galante still has to work part-time as a family caregiving consultant. She showed CBS News her payment history, including all of the interest.
Galante had to pause making payments four times for various life issues. But the bigger issue is she got older. Her monthly payment of $176 is income-based. That doesn’t even cover the interest.
“I don’t see the justice or even the logic. It’s not gonna reduce, ever. And the emotional part of it that it’s there. That it’s always gonna be there,” Galante said.
Debt narrows the choices of tens of millions of young, not-so-young, and even not-at-all-young Americans. So much freedom! Can you taste the freedom?
The scale of this problem has been noticed by, uh, a lot of people, including some of the Democrats running for President.
Consensus among some left-leaning economists and policymakers has been building over the past few years that some form of debt cancellation might actually benefit the economy by freeing up money young people spend servicing their debt for home and car buying as well as other major purchases.
“You’re going to see some pretty bold proposals on debt relief or debt cancellation from candidates,” Huelsman said.
It would be a glaring omission to not mention Elizabeth Warren here – she’s been particularly focused on this issue for years.
During her tenure in the Senate, Warren has regularly used her role to call attention to challenges students and families face affording college and repaying student loans. As a presidential candidate, she unveiled the most dramatic proposal to address these issues.
Under Warren’s plan, which she released in April, a large swath of student-loan borrowers could have at least part of their debt cancelled. …
In addition to the debt-cancellation plan, Warren is also proposing to make public colleges tuition-free and to dramatically expand the Pell grant, the money the government gives low-income students to attend college.
That’s a nice change of pace from the “Why don’t we just send them to work in the salt mines?” approach typified by the Trump administration.
“We write, as the Attorneys General of our jurisdictions, to urge the Department of Education to take prompt action to satisfy its statutory mandate to discharge the student loans of veterans who are permanently and totally disabled or otherwise unemployable,” the letter says. “As a nation, we have a moral obligation to assist those who have put their lives on the line to defend us.”
While the student loans of disabled veterans are required to be discharged by law when they make the request, the letter asks DeVos to make the loan discharges automatic, stating the current requirements to secure loan forgiveness “may prove insurmountable obstacles to relief for many eligible veterans due to the severe nature of their disabilities.” …
In a statement to Reuters Friday, the Department of Education pushed back on the letter, saying, “While ‘automatic discharge’ may seem like a simple solution, there are long-term impacts we want all veterans to have the chance to consider before their loans are discharged.”
The department told Reuters they wanted veterans to be aware that loan “discharges might boost their tax bills or make it harder to borrow for education later.”
The most obvious possible political choice – do we do a nice, universally popular thing for disabled veterans? – and they don’t want to do it.
Yeah, me too, cartoon guy. It makes me angry too.
Bonus public service announcement from that first link:
There are more reasonable ways of dealing with student debt, said Nassirian, at the American Association of State Colleges and Universities.
Struggling borrowers should enter into one of the government’s income-based repayment plans instead, in which their monthly bill will be capped at a portion of their income, he said. Some payments wind up being as little as $0 a month. [WPT dictator’s note: can personally confirm.]
Alright, let’s keep this thread free of threats against Mayor McSquirrel, or anybody else. And if things get too heated, we’ll take to the sea!