Our student debt is outta control

Our parents and grandparents are fond of reminiscing about the “good old days,” a time before the world was as complicated and frightening as it is now. When they’re not decrying the decadence of contemporary youth or the unnecessary nature of modern technology, their nostalgia will reflect on the massive inflation that comes with the passage of time, and they make statements such as, “when I was a kid, a candy bar cost five cents,” or “I bought my first car for $500 and a bottle of whiskey.”

Forty years from now, our generation will be telling our kids things like, “when I was your age, I was $80,000 in debt, unemployed, and I had no idea how I was going to repay my student loans.”

Ever since the golden age of the American middle class, that which came after the end of World War II, the number of Americans seeking higher education has skyrocketed, and with it, the costs of said education. The bad news is, the cost of going to college shows no sign of slowing down.

From 2008-2009 the average cost of attending a four-year public university went up 6.5%, and 4.4% for private four-year colleges, according to an annual report released by the college board. This increase still came during the belt-tightening period being done by academic institutions to cope with the recession.

But while colleges tighten belts and cut spending to reduce their debt, students find their debt soaring out of proportion.

Stephanie Reardon is an English major who graduated from Suffolk University this past May. “Give or take, [I’m] $60,000 in debt- probably more. If I’m lucky, [the loans will] be paid off by the time I’m 50.” Reardon also expressed anxiety about being able to pay back her loans on time in the midst of a recession, stating, “I look at it this way: I have six months to find a job and in this market, that isn’t looking like it’s going to happen. It stresses me out, trying to think of ways to make enough money to pay my bills since I can’t seem to find a career path job yet.”

Unfortunately, Reardon’s experience with debt is all too symptomatic of college students across the country. From 2007-2008, the average loan debt for those graduating with a bachelor’s degree was $19,999, a 5% increase over four years. In addition, about 66% of those graduating with a bachelor’s degree took out some sort of loan.

The amount of low-interest, not-for-profit federal loans have proven harder and harder to obtain overtime with the high demand and limited supply the government has to offer, and over time, more and more Americans have found themselves too poor to afford college, but too rich to qualify for federal loans.

Schools don’t exactly help either. Financial aid packages rarely take single-parenthood into consideration, nor do universities look at how many other children from a given family are simultaneously looking to get money for college.

Enter Wall Street, bankers, and predatory lending that would make a mafia loan shark blush. According to Forbes Magazine, private lenders can tack on a 10% on top of a 18% variable interest rate that accrue the moment a loan is funded, and the high profitability has attracted the attention of such snake oil salesmen as Citigroup, Bank of America and Wells Fargo. New York Attorney General Andrew Cuomo has even gone so far as to call private loans “The Wild West of the student loan industry.”

But whereas a degenerate gambler fears for his legs getting broken, college students fear a lifetime of spiraling debt. If anything, there’s a disadvantage [to private loans],” Reardon states, adding, “I’m learning the hard way that private loans can’t be consolidated. It’s making my payments very difficult.”

In addition, some are forgoing college altogether because of the high cost of tuition. Roughly 7.22% of students drop out of college because of debt. “In this day and age, it seems like college is a must if you want to be able to make your way in the so-called real world. Everyone knows it,” Reardon says.

One study shows that people with a Bachelor’s degree earn up to 60% more than those with just a high school diploma and the difference in earning increase over a lifetime can exceed $800,000. A Bachelor’s degree makes all the difference in the world in terms of a career, and skyrocketing tuition costs could ultimately stratify the middle class and cause an increase in economic inequality.

While the future looks pretty bleak, it’s not as if there’s nothing that can be done. In March, President Obama signed an overhaul of the federal student loan program that is aimed at expanding access to education, and if anything, this is sending the signal that the federal government is ready to make education more accessible. So maybe we won’t all be in debt by the time we’re telling stories to our grandchildren.

Illustration by Julian Glander