- A decent college education shouldn’t leave students thousands and thousands of dollars in debt.
- During the pandemic, millions of people are experiencing financial uncertainty.
- Now is the time to address the underlying issues that lead to massive student loan debt.
- J.H. Deakins is a writer from Los Angeles.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit Business Insider’s homepage for more stories.
Through a plain white envelope, with my name and address printed on its side, sent from my alma mater — instead of getting it onstage at graduation — I was handed my diploma by my mailbox.
As a country, we’ve been ravaged by the coronavirus pandemic. No one is safe from the all-encompassing effects of what is now being called “the new normal.” The economy is slipping precipitously into a deeper and deeper abyss. Public institutions, like the one I just graduated from, are facing an existential crisis. I picked a hell of a time to become a writer.
Around four million college students disembarked from the familiarity of school this year. Over the last month and a half, graduates of the class of 2020 transitioned into their working lives in an era of unprecedented uncertainty. Without the commencements, the addresses from look-what-I’ve-accomplished alumni, or stiff cloth caps and gowns, it’s hard to not feel cheated.
I don’t want the cheering-up. I don’t want the niceties from out-of-touch celebrities who could pay my debt one hundred times over. What I want — along with at least 1.2 million of my cohorts — is a long, serious look at alleviating student debt. All $1.6 trillion of it. Student loan cancellation was at the forefront of the Democratic debates and was a major selling point for several of the key candidates (The eventual nominee, Joe Biden, unfortunately, was not among them).
But facing the uncertainty of economic meltdown, it’s time for Biden, Congress, and our incumbent president to take that serious look.
Plans that fall short
As it stands, the two nominees for president have woefully inadequate plans to address the scale of the student debt crisis. Finally, a bipartisan issue both parties have no qualms agreeing on.
Biden’s plan makes individuals with an income under $25,000 per year exempt from student loan payments. Regrettably, according to the Bureau of Labor and Statistics’ latest data, the average annual income for Americans ages 20 to 24 (college-aged or immediately post-grad) is roughly $30,000 – that average only increases with age.
For those above the $25,000 threshold, Biden ensures that only 5% of your discretionary income (income minus taxes, housing, food, other essentials) will mandatorily go toward your loans. Keep this up and, Biden promises, after twenty years of consistent payment, the remainder will be forgiven.
Let’s do some quick math and find out what that monthly bill will look like. Say you’re making $30,000 a year and you live in Cleveland. In Ohio, your average tax rate is around 15.5%. Median monthly rent in Cleveland was about $700 and other essentials add $200 a month to that. After tax, housing, and other essential spending you’d have $14,550 of annual discretionary income or $1,212.50 a month – take five percent of that and you have the lucky number.
The average graduate left college with $37,000 in debt in 2017. With Biden’s proposal, Jane Doe, our Ohioan everywoman will be paying about $60 a month for twenty years – nearly fifteen thousand dollars.
In contrast, Mr. Trump’s proposal in his 2021 budget increases the monthly rate to 12.5% of discretionary income and creates a fifteen year window for forgiveness. Jane Doe pays $151 a month for fifteen years: $27,281.
That sum comes out of the same pot you use to buy a home, lease a car, or pay an unexpected hospital bill. The save and accumulate American mantra doesn’t float.
I choose my words carefully and say a “long, serious look” as to be realistic, to understand that a Sandersesque broad-stroke cancellation of all debt isn’t in the cards yet. But to emphasize also the severity of that load’s weight on the 45 million borrowers who share it. With continued inaction, we are consciously hamstringing the financial stability of millions of Americans and leaving them in an economically precarious situation
Fixing the underlying issue
There is no cure-all for $1.6 trillion of student debt. No two politicians will agree, nor two economists, nor two college graduates. I analyzed Biden’s and Trump’s plans to show where the current, realistic middle-of-the-road policy from each party’s leader stands – not, by any means, to endorse either.
But with Biden’s more generous proposal or the idea of doing away with the current outstanding debt, there is another issue. A decent college education still shouldn’t leave Americans tens of thousands of dollars in debt.
Currently, the most expensive in-state tuition for public universities can climb as high as $90,000 for four years. That’s the cost of tuition for tax-paying residents who want to attend their own state school. Make that an Ivy League and that’ll set you back two or three times that (maybe more depending on how much you want to get in).
The skyrocketing cost of what is becoming a necessary part of education must be part of any student debt relief plan.
Change to this system comes through understanding the policies our representatives are advocating for and acknowledging steps necessary to bring down the cost of college. Every recent and soon-to-be graduate should remember that there is still so much to be done regarding the cost of college. Arm yourself with the data and vote accordingly.
The graduating class of 2020 could represent, not only the recovery of a ravaged country, but the renewed urgency of facing existential threats like global pandemic, student debt, or climate change and fighting them preemptively, collectively. We are the future of humanity and the guarantors that those who come after us will be looked after.
We are heading full sail into a tempest of political, economic, and social upheaval, we don’t need your streamed sympathy or pity — we need policies to address the problems gripping our society. If anything positive comes from a year like 2020, it will be that the next generation of doctors, lawyers, journalists, etc., are hardened in their resolve to advocate for those policies and face systemic issues head on.
I didn’t get to live the vision I had of my graduation. I didn’t get to stroll across a stage, for family and friends alike, diploma in hand, waving to professors, making a snarky comment to my dad as we pose for a photograph, etc. Instead I listened to Oprah tell me everything will be O.K., got a pat on the back from Walgreens, and even watched a couple musical performances.
For now, forget the e-ceremonies and televised congratulations. Let the class of 2020 feel cheated. My diploma came alongside a coupon book and a credit card statement. Remember when November comes, vote accordingly.
J.H. Deakins is a freelance journalist and screenwriter from Los Angeles.