What Free College And Canceling Student Debt Would Do for the Economy.
How removing this massive burden could affect the day to day lives of average Americans and their overall economic health.
Thanks largely to Elizabeth Warren and Bernie Sanders, the staggering student loan debt of 1.6 trillion dollars has been a critical issue that democratic presidential nominee hopefuls have been compelled to acknowledge. Warren led the charge, and released a plan in which she established a means-based system that would determine how much student loan debt the government would cancel, eliminating at least some portion of debt for 95% of the people affected by the burden. Bernie Sanders being Bernie of course rose to the challenge, and released his own plan with Representatives Ilhan Omar and Pramila Jayapal that cancelled all of the student loan debt across the board. Both plans would also make public college tuition free. When discussing Bernie’s plan, CNN states:
“The new legislation would cancel $1.6 trillion of student loan undergraduate and graduate debt for approximately 45 million people. His ambitious plan has no eligibility limitations and would be paid for with a new tax on Wall Street speculation.
The proposal goes further than the plan previously unveiled by his Democratic primary rival Sen. Elizabeth Warren. Her debt relief package was subject to income eligibility levels to determine how much relief the average person would receive — parameters that Warren said were aimed at closing the racial wealth gap. Under the Sanders plan, if you have student debt of any kind it would be canceled the second the legislation is signed into law.”
Unsurprisingly, there have been a number of critics who feel that both of these plans are impractical and unnecessary, especially on the right. Critics on the left are mostly of the view that Bernie’s plan in particular just goes too far, and gives debt relief to those who don’t necessarily need it. However, given the magnitude of the problem we really have no choice but to consider how this massive amount of debt that is weighing down the financial and spending power of million of people is affecting not just their own personal economic health, but the health of the economy overall.
According to debt.org, the typical student has an average of almost 40,000 dollars in student loan debt to pay off. Over the course of ten years, that’s almost 340 dollars a month in payments. In a combined household of two people with that amount of debt, that potentially adds up to 680 dollars of student loans. It’s difficult to even know where to begin in terms of addressing all the other ways that money could be spent.
First, let’s begin with how rapidly this cost has risen, leaving society with very little time to prepare. Affordable college can be directly correlated to the strength of the middle class, as we saw when the GI bill after World War Two opened up a wide number of academic doors for the young predominantly white men coming home from war. Even those who hadn’t gone to war and went straight to college were only expected to pay just one hundred dollars for in state tuition during the 1949–1950 school year.
Today, tuition at SUNY Canton in New York for example is close to 16,000 dollars a year. I probably don’t even need to add that SUNY is a public institution, and while it’s expensive there’s no comparison to the costs of private colleges and universities. The private St. Lawrence University, also in Canton, costs over 52,000 a year. The amount of debt that students are being shackled with is frankly unsustainable. It’s a burden that stays with people for decades, and affects the course of their entire future.
The student debt burden is so profound, that it’s even affecting the birth rate of an entire generation of people. CNBC did a piece in 2018 detailing how the crisis is causing a significant number of women and couples to put off having kids. The article also cites the differences in debt between men and women, and says:
“Largely because women outnumber men in college these days and are more likely to pursue a graduate degree, they are the ones who end up with the bigger loan balances.
In fact, 42 percent of women have more than $30,000 in college debt, compared with 27 percent of men. Women also are two times more likely than men to think it will take more than 20 years to pay off their loans, according to market research firm ORC International.”
According to girlpowermarketing.com, women account for a staggering 85% of all consumer purchases. Imagine the further impact they could have on the economy if they weren’t burdened with a disproportionate amount of the student loan debt.
I firmly believe that the single greatest investment a country can make is not in its military, it’s banks, or its corporations, but in the education of youth. No one who is looking to better their chances and educate themselves should have to weigh in the factor of debt, which is oftentimes so overwhelming that it makes college unrealistic to some people out of hand. We are so quick within our culture to demonize anyone whose grades aren’t “up to par” as unworthy of a program like this, and they’re often pointed to as reasons why free public college should never come to fruition. But have we ever paused to consider the fact that maybe if these students had college within their sights as a realistic, attainable goal, they might just seek to fulfill their potential?
Even putting that aside, let’s imagine a scenario of what our country would look like if anyone who wanted to go to college was able to go free from student loan debt as a consideration. Businesses would be opening. Houses and cars would be bought. Investments would be made. It would propel the growth of a real, healthy economy based not on loan debt but the real money that people are able to put in to it
Isn’t that what capitalism is supposed to be all about? Isn’t it a system that’s supposed to allow people to thrive? In my view, the fact that there is such staunch resistance to what should be a common sense ideal is yet another indicator of the fact that capitalism is dying, and education reform is likely the best way in which we can ensure economic prosperity for the masses and a sound future for our young people.