The Growing Call to Abolish Student Debt

A bill introduced in Congress would eliminate $23 billion dollars’ worth of student debt over ten years. The plan is supported by the Democratic Party’s presidential candidate Hillary Clinton and her rival Bernie Sanders.

The College Opportunity Tax Credit (COTC) would allow people who have student loans to pay them off more quickly. If passed, the COTC would cost around $20 billion per year for the first few years, then gradually decrease until it vanished entirely.

Under the proposed legislation, students would receive between $5,000 and $8,000 depending on their income level. People making less than $100,000 annually would receive $5,000, while those making more than $250,000 would get $7,500.

President Obama says he supports the idea and believes that if enough people are educated about how student debt affects them, they could help pressure lawmakers to pass the bill.

In 2014, student loan debt reached a record high of $1 trillion.

That number has been steadily growing each and every year since. According to the Center for American Progress, nearly 40 million Americans owe $1.2 trillion in student loan debt.

And according to research conducted by researchers at Michigan State University, almost half of all college graduates borrow money to finance their education.

So what can we do? We can push our politicians to support the bill and encourage others to do the same.

And finally, let’s talk about ourselves! Let us stop borrowing money to go to school. Every month I hear someone say, “I need a new phone.” Or ‘I need a bigger TV.’ Let’s start buying things we actually want instead of spending money on something we don’t really care about.

Let’s vote in November for candidates who will stand behind this bill and educate us all about how student debt affects us.

Why did we forget to talk about this before? Maybe, just maybe, we were trying to avoid being labeled a political party, but we’re not any more. Now that we’ve talked about it, let’s get rid of student debt once and for all!

The Growing Call to Abolish Student Debt

How student debt is affecting America’s youth

In December 2017, Americans owed roughly $1.5 trillion dollars in total outstanding student loan debt (including private education loans), which was over 10% higher than the previous record set back in June 2010 ($1.2 trillion). There were nearly 44 million borrowers at some point in 2016 who collectively held $973 billion in outstanding debt – the highest ever recorded. To put these numbers in perspective, student loan debt now exceeds credit card debt, auto or mortgage debt, and even medical debt.

What does student debt mean for future job prospects?

Today’s students face a staggering amount of student loan debt, totaling roughly $1.5 trillion. Many people believe that student debt is a problem for young adults just starting out in their careers. However, research shows that college graduates with significant student loan debt have lower earnings when compared to those without debt (Bureau of Labor Statistics, 2017). While many graduate with degrees that enable them to earn substantial salaries, they may not be able to do so if they owe hundreds of thousands of dollars in student debt.

What does student debt cost taxpayers?

According to data collected by the Congressional Budget Office (CBO) and analyzed by the Institute on Taxation & Economic Policy (ITEP), the average interest rate charged for federal Stafford Loans increased from 4% in 2008 to 6.8% in 2014. In 2015, the average interest rate charged on federally subsidized private student loans doubled from 2.41% to 5.32%. Together, state and local governments spent about $40 billion subsidizing student loan debt payments between 2013 and 2015, according to a study by the National Consumer Law Center.

Why should the state take action?

Student loan debt is a national issue, impacting families across the country. However, each state faces its own unique challenges due to variations in student demographics and funding mechanisms. As the largest provider of aid to higher education, states bear considerable responsibility for ensuring that students are informed about options and have access to financial assistance programs. Allowing students to borrow money at low rates creates an incentive to pursue higher education. If student debt increases, then tuition costs could increase along with the resulting price tag for state residents. According to ITEP, “If all student loan defaults occurred tomorrow, it would add approximately $100 billion to the nation’s deficit over the next decade.”

What can be done to help alleviate the burden?

Students and parents need information about how much student debt they are likely to incur and what repayment options are available, including income-driven plans that allow students to pay off their debt faster. State regulations should require colleges and universities to provide students with information about loan options and repayment strategies. Additionally, states should consider implementing income-based repayment plans for public service borrowers.

The Growing Call to Abolish Student Debt

The Growing Call to Abolish Student Debt

Student loans should not be considered a right.

Student debt shouldn’t exist. Instead, it should be viewed as a business loan. Let’s make student loans voluntary, interest-free, and non-recourse. At the same time, we need to stop giving money away to banks at below-market rates.

Free college tuition is morally wrong.

We’re paying these students to go to college? Why? Colleges have no obligation to pay their employees. If colleges want to hire someone, they should pay them what they deserve. If universities want to use student labor to keep costs down, then they should do it themselves. We don’t owe them anything.

Education is a public good.

What about everyone else who doesn’t get a college degree? Why does education only benefit those who already have degrees?

Students aren’t getting educated. College enrollment has decreased over 50% in the past 50 years. Students are waiting until later in life to start their careers. We’re making everyone poorer, and the people who are suffering the most are the ones who never received any kind of higher education.

All of us should be concerned that our children will face skyrocketing tuition and crushing debt if they decide to attend college. And yet, our government continues to funnel billions of dollars into private banks. This isn’t just immoral, it’s stupid.

The current system rewards bad behavior by borrowing money without ever intending to repay it.

It’s absurd that student loans can’t be discharged in bankruptcy.

We spend $1 trillion per year on student loans, even though we could easily afford to provide free college. Our entire economy runs on educated workers. Yet, no matter how much we borrow, we still end up owing more than we would’ve had we paid for the service ourselves.

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