Why America Needs a Student Debt Jubilee
Student loan debt is a nationwide disaster. There is currently over 1.4 trillion dollars of debt accrued by 42 million students and graduates. In a opinion piece written by a loan collector in 2011, he wrote “As I wandered around the crowd of NYU students at their rally protesting student debt at the end of February, I couldn’t believe the accumulated wealth they represented – for our industry. It was lip-smacking.”
The student debt crisis has become an almost unstoppable juggernaut, a machine built on suffering until the banks get their due. It began with the historic GI Bill after the Second World War, which granted eight million veterans the funds for college education, and millions more were given financing to purchase their own home.
With the post war boom, we saw higher education become less of an “option” and more of a “requirement” for occupations outside of manual labor. With college becoming more and more of a necessity, institutions were free to slowly increase the cost of tuition in order to make a higher profit.
Ordinarily the high cost of tuition would be acceptable; students are paying a premium for the enrichment of knowledge they will receive, and they will be able to apply that knowledge into high paying jobs. However, due to the higher skill and experience levels of graduates, more and more companies have found that it is more profitable to not hire these graduates. Without a job and thousands of dollars of debt, these Americans spiral into financial despair. The only way out of a student loan is death, after all.
With student loans going unpaid, the bank industry panicked during the 2008 recession, and the Federal Government stepped in. The government began guaranteeing student loans at public institutions, meaning banks could rest easy: if the student is unable to repay the debt, the government would pay, and use a collecting agency to ensure they are repaid for their generosity.
This charity was also a disaster though, with most student loans guaranteed by the United States government, there was even less risk and more profit to be had from dealing out predatory loans to potential students. The business of college education, either through legitimate universities or from for-profit sham colleges, boomed.
There are some ways for a student’s debt to be forgiven now, but they are slim: public service forgiveness being one, which requires 10 years of public service and loan payments for the debt to be forgiven.
There is another option, which is unspeakable to the financial industry: a student debt jubilee. A complete forgiveness of debt for approximately 42 million Americans. Over a trillion dollars of debt gone. It would liberate a generation of Americans taught that college meant something, that they would be able to succeed with a degree under their belt.
How feasible is a student loan jubilee?
In order for the crisis to not renew itself in a generation, it would require real change to the collegiate system of America. We need a system of free college education for those that want it. Senator Bernie Sanders of Vermont ran in 2016 on a platform of free health care and college education, and received wide praise and support for it, but many dismiss the notion outright as too expensive.
Senator Sanders recently proposed a bill to waive tuition and fees at public universities for students from households making $125,000 or less a year. New York State legislature also recently passed in their budget a resolution to make tuition free for households of $100,000 or less. “Our job — if we are smart — is to make it easier for people to get the education they need, not harder,” Sanders said. “The United States not so many years ago in terms of the percentage of young people who graduated college — we were number one. Today we are in eleventh place. … That is not a prescription for a strong American economy of the future. It is a prescription for failure, and together we are going to change that.”
Those that argue it is simply a generation looking for handouts, I might want to remind them that the baby boomers exhausted the social security system such that this generation and perhaps others will never see the benefits. We as Americans should not let fellow Americans starve because of their pursuit of knowledge or of a better life.