As college students return to classes this week, William Chace has some gloomy news. Writing in The New York Times, the former president of Emory and Wesleyan warned: “How will many of you begin your adult lives? In serious debt.”
He’s right, and the debt problem is getting worse. The average student graduates today owing $19,000 in loans, up from $12,000 in current dollars 10 years ago. About 1-in-10 owes $40,000 or more. Add in graduate school, and loan obligations can easily top $100,000.
A serious class conflict divides the nation’s campuses. On one side are privileged grads entering the work force debt-free because Mom and Dad foot the bill; on the other are students shouldering huge loan burdens. “It’s a real crisis,” Diana Cantor of the Virginia College Savings Plan told USA Today. “You’re strapped before you get started.”
As a professor at George Washington University, Steve sees evidence of this crisis every day. Wealthier students can afford to take unpaid internships that provide invaluable career advancement. Kids who wait tables to pay their bills can’t do that.
More seriously, students graduating with large loans face severely diminished career choices. They simply can’t afford to take jobs that provide psychic rewards instead of financial ones. According to a study by the Public Interest Research Group, more than one-third of all private college grads can’t pay back their loans on a teacher’s salary, and more than half can’t afford to be social workers.
Instead of easing this unfairness, Congress and the Bush administration are actually adding to it. On July 1, a new bill raised the interest rate on Stafford loans – the primary program for undergrads – from 5.3 per cent to 6.8 percent. PLUS loans, which go to parents not students, zoomed to 8.5 percent.
Meanwhile, over the last three years, Congress has failed to increase funding for Pell grants, the main direct-aid program. The maximum grant is stuck at $4,050, while the average annual cost at a private university has risen to $32,000. Even public colleges cost about $15,000.
Consider one of Steve’s former students, Monica T., daughter of a Portugese immigrant with a grade-school education. A brilliant and determined young woman, she enrolled in law school with one goal: to go back to New Jersey and serve her community as a street lawyer. But will her dream be crushed under a mountain of debt?
Actually, Monica is one of the lucky ones. With middle-income wages stagnating, rising tuitions and loan payments are keeping other deserving students out of college entirely – just as global competition increases the nation’s need for well-schooled workers.
This makes absolutely no sense. College aid programs are like vaccines for children, modest investments that pay enormous dividends down the road. But this administration is more interested in helping its rich contributors than struggling parents. While raising interest rates on college loans – in the name of deficit reduction – it’s pushing repeal of the estate tax, a proposal that aggravates the deficit and benefits families that can afford to buy a college dorm of their own.
Make no mistake, hard work never hurt anybody, including college students. Kids who contribute to their own education learn a valuable lesson about self-reliance. Prancing around in $300 jeans paid for with Daddy’s credit card is not exactly an ideal college experience either.
But when loan burdens keep expanding, while career choices keep shrinking, something is wrong. The maximum Pell grant should at least rise with inflation. The ill-advised jump in interest rates on Stafford and PLUS loans should be rolled back. Modest government programs that forgive loans for students working in public service jobs, including AmeriCorps, should be greatly enhanced.
Private charity can play a role as well, and here are just two examples. Broadcaster Larry King, who never went to college, has generously endowed a scholarship fund at GWU that now helps several students a year reduce their loan burdens. Recent beneficiaries include a Latino from New Mexico whose mother works in a school cafeteria, and a black woman from Mississippi who’s headed for law school.
Our friends Miles and Nancy Rubin have helped endow a fund at Stanford Law School that will repay the loans of students who enter public service. Their stated aim: “that salary will not drive alumni career decisions.”
That’s a noble goal. Monica T. should be able to work in a dingy storefront, helping her immigrant Portugese neighbors, instead of a fancy corporate high rise.
Steve Roberts’ latest book is “My Fathers’ Houses: Memoir of a Family” (William Morrow, 2005). Steve and Cokie Roberts can be contacted by e-mail at email@example.com.
Copyright 2006, United Feature Syndicate, Inc.