Streams

How Student Debt Is Crippling Our Future

Thursday, February 17, 2011 - 12:00 PM

Yesterday, students gathered in Washington Square Park to advertise their debt. Calling attention to the issue of student debt - and shaking off the stigma many associate with having such debt - these demonstrators wore their debt across their chest.

Their shirts read: "$80,000." "$200,000." "An Arm and a Leg." "Too Much."

It might not have resembled the squares of Egypt - or even the streets of Madison, Wisconsin where protestors rally against the governor's threat to call the National Guard against workers. But if organizers are successful, this will just be the first of many campus demonstrations to raise an important issue: that we're bankrupting our next generation even as we're "investing" in them.

This event was coordinated by Andrew Jenks, a filmmaker and protagonist of an MTV documentary series in which he explores the lives of young Americans. As he traveled the country, he heard a familiar concern: the rising cost of education. But he also heard a new twist on it: not that students couldn't get the money to get an education, but that they couldn't escape their debt burden once they entered the workforce.

This isn't just anecdotall. More than ever, we're becoming aware of the societal hazards arising from our debt-burdened culture. Countless Americans are paying off mortgages they can no longer afford on houses that have lost their values. Many more are caught in cycles of credit card debt as "easy money" leads to exploding interest rates and endless attempts to dig out of the hole. Medical bills often leave Americans with debt burdens they can't even conceive of tackling.

Student loan debt, though, now stands at a greater total than credit card debt nationally. It is often viewed as "good debt" since our country values education, and there is a special emphasis on the need for higher education. But it's turning out graduates who are actually carrying a very bad debt. Unlike other countries with policies to delay student loan repayments when the debtor is unemployed, or bases payment levels on income levels, our policies allow for a more rigid repayment policy. Even bankruptcy isn't a cure for student debt.

The President calls on us to out-educate and out-innovate other countries, but our college-educated graduates, entering a workforce with no jobs, have no room to innovate. With deep debt, relentless payments and heavy fines, there is a disincentive to work for cheap on a new start-up. Working for non-profits and community organizations looks much less appealing. And forget the kind of creative (and often "underemployed") pursuits that may to cultural, entrepreneurial and even lucrative contributions to the nation's economy.

The Wall Street Journal reported on a doctor whose debt had ballooned to $550,000, ruining her credit rating and her chances to really invest in her community and her own stability, despite now having regular, professional employment. While this is an extreme case, it's not unusual for graduates to find themselves in this debt trap. And it's all too common that the rules of the debt game aren't serving our society.

The doctor in the article describes the shame she felt at this situation. It's that feeling that can leave this issue in the shadows, which is what the students at Washington Square Park were challenging. They didn't have an answer to this problem - but by demonstrating, they hoped to help more Americans see the problem. Maybe the solution is in a massive move to reassess existing debt. Maybe it will be a transformative approach to debt policies. First, though, it needs to be discussed.

Jenks started at NYU because it was his alma mater. He and other organizers hope to foster these demonstrations elsewhere. It's not yet an urgent call to action that floods the Wisconsin statehouse with protestors. But it's an important prompt to a conversation about ensuring the next generation we're investing in is capable of investing back into America.

Justin Krebs is a political organizer and writer based in New York City. He is the founder of Living Liberally, a nationwide network of 250 local clubs that create social events around progressive politics, and author of "538 Ways to Live, Work and Play Like a Liberal."

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Mar. 23 2011 07:36 AM
Default: The Student Loan Documentary from San Francisco

Justin,

A lot of what you discussed rings so true with so many of my peers today. For the past 3 years we have traveled the country interviewing many of these people stuck in this situation for our film, Default: The Student Loan Documentary. We have over 30 hours of film and our documentary will be airing on TV very soon.

We have been organizing with students and student groups as well to draw attention to this serious matter. Last week we had our film shown at an anti-austerity demonstration in Paris. Over the next two weeks we have screenings scheduled at UC- Berkeley, Cal State- Monterey Bay, and Arizona State University. Very soon we will also be announcing screenings in conjunction with student groups in San Francisco, Washington, D.C., Madison, New York, Riverside, and Chicago.

This issue is very personal for me and my story was aired in December in the CNBC documentary, "Price of Admission: America's College Debt Crisis".

I encourage Jenks, yourself and others that are now covering this issue to continue to do so and ask our leaders why so much of this is necessary for our young people. Please let us know if you or Jenks want to partner together on future events.

Thanks again!

Kyle McCarthy
Dir of Community Outreach
Krotala Films, DefaultMovie.com
Kyle@Krotala.com
Facebook.com/DefaultMovie

Feb. 22 2011 04:07 AM
Cortney Munna

Thank you for this piece.

Feb. 18 2011 11:07 AM
Chad from Houston

Students should be aware of what they are spending, but in some cases the students where out right lied to. I attended flight school where I was told after graduation I could expect a $200,000 a year job. 100,000 in student loans does not sound bad, but in reality a pilot is lucky to make 20,000 a year. Now my loans have ballooned to over $300,000 with no hope of ever paying it off. Even better than that my loans I cannot discharge in bankruptcy but the lender filed for Bankruptcy and had there depts discharged. What is right about that? These students are not asking for special treatment they are just asking for the same consumer protections that the companies such as aig and bank of America get along with the average consumer.

Feb. 17 2011 05:53 PM
Lemuel Morrison from new york, ny

I am sympathetic to these students. However, it seems to me that you made your bed, now you have to sleep in it. By attending a very expensive university, these students shackled themselves. And severely limited their options. I am concerned for them, but more for the rest of us.

I paid for most of my undergrad by working and with loans that were manageable. Most importantly I attended a state university. I was able to take the work I wanted, not what I had to take in order to pay off my loans.

By getting my MBA from the Zicklin School at Baruch, I don't need any loans. Sure I don't have all the perks (parties and amenities, or working escalators) one gets at a private institution. But I get the gift of a hard-won education and being able to do what I want when I graduate.

Sure, it will be tough to pay the loans off. The devil will be in finding work that pays without compromising your soul or making ill advised gambles with consequences for the rest of us. Good Luck.

Feb. 17 2011 05:37 PM
Alex

I agree with Paul in that these students knew exactly what they were getting themselves into when they applied to expensive programs.

However, I think that there is a problem when a Master's program or even a Ph.D doesn't help you get a job. Some sectors are failing to place recent grads into long-term jobs making these student loans increasingly difficult to pay. With that said, before you decide whether to go to a graduate program, you should first do research into the career path and consider the possibility that you won't have a job for at least a few years out of school.

Also, paying tens of thousands of dollars for an undergraduate degree is simply unwise.

Feb. 17 2011 03:31 PM
Paul

I'm sorry, but picking NYU as the place to begin these demonstrations strikes me as quite stupid. One of the most expensive universities in one of the most expensive cities on the planet? As if these kids didn't know what they were getting themselves into.

You receive your tuition plan and your financial aid package well before the deadline to enroll in a college. During my senior year of high school, I faced a choice between an in-state public school and a more prestigious out-of-state private school that would have cost my family more for one year of classes than all four years at the public college. I stayed in state, graduated with no debt, and I've got something resembling a real job today.

I sympathize with students who are in debt. Not everyone has parents who are able or willing to help them pay for their education, and that is truly a shame. However, I question the wisdom of attending a $40,000+/year university in New York City when you KNOW you can't afford it.

Feb. 17 2011 12:02 PM

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