We came to realize that our aggregate reported student loan balance was at the low end of the substantial range of publicly available sources.
The New York Federal Reserve, after revising its August 2011 calculation of outstanding student loan debt from $550 billion to $845 billion–an increase of 53.7 percent.
That’s what some educators would have you believe. Meet Jesse Yeh, a student at the University of California, Berkeley. He voluntarily suffers the indignities of using library books instead of purchasing text books; he seeks out free food at campus events and skips meals (gasp!); and he loads up on courses, taking 21 credit-hours in one semester, presumably to get the most out of every tuition dollar spent. And he won’t take out a student loan–because he doesn’t need to.
Yeh is ahead of his time. He sees how debt has robbed graduates of economic prosperity. From the Associated Press:
“I see a lot of my friends who took out student loans, then they graduated and because of the economy right now they still couldn’t find a job,” said the third-year student [Yeh], whose parents both lost their jobs in 2009 and who grew up in the boom-and-bust town of Victorville, Calif., on a block with several houses in foreclosure. “The debt burden is really heavy on them.”
Students like Yeh worry educators. They fear that if students don’t take out loans, they can’t raise tuition. And if they can’t raise tuition, they can’t raise their own salaries. Or provide luxurious campuses that resemble country clubs. But educators don’t say that. Instead, they frame their fears as worry for students. They’re worried that students won’t graduate unless they live the student-loan-funded easy life. They’ll “trade down” and go to cheaper, less-prestigious schools. The horrors!
What would Jesus do? Forgive student debt, according to Susan Brooks Thistlethwaite, a former president of the Chicago Theological Seminary. In an opinion piece on the Washington Post’s “On Faith” blog, Thistlethwaite advocates for the forgiveness of student loan debt, approaching the issue as a moral one:
Jesus teaches his disciples to pray, “And forgive us our debts, as we forgive our debtors.” (Matthew 6:12) Forgiving debt is a moral issue. Forgiving some of the worst of this student debt is crucial literally to save this American generation.
She notes that President Obama has attempted to ease the student loan burden by executive order, but that is not enough; legislation is needed to deal with outstanding student loan debt, which is rapidly approaching $1 trillion dollars.
So what can students do?
“I don’t think I could do it [campaign for Obama] anymore,” she said. “That campaign was an amazing experience. But I don’t think I’m in the same mind-set anymore. He hasn’t really addressed the young people, and we helped him to get elected.”
Emma Guerrero, as quoted in the a New York Times piece, “Students Lose Enthusiasm for Aiding Obama Again.” Maybe Obama should focus on passing a student loan reform package that offers significant aid to recent graduates.
We all know that student loans have been growing out of control. But how much? A new chart in The Atlantic compares the growth of student loans with the growth of household debt:
What’s astonishing about this chart is that even the blue line–representing household debt–is abnormally steep. The line represents growth in household debt inclusive of the period between 1999 and 2008, when household debt tripled due to the housing bubble. But compared to the red line–student debt–household debt has been rather tame!
What does this all mean? The Atlantic argues that student debt will cause a period of low economic growth, as new entrants to the labor force end up repaying student loans instead of buying goods and services.
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