In 2012, a sort of media blitz emerged when the Consumer Financial Bureau announced that student debt passed the $1 trillion mark, a number that news organizations decided was the marker for when it was time to start talking about the “student loan crisis.” Alongside these concerns came horror stories from med school and for-profit college students attesting to six-figure debt balances, financed with the help of third-party loan providers gladly shelling out cash for college at rates from two to 15 percent or more. This media blitz continues even today with op-ed commentary from student debt-free adults about why this is or is not the “crisis” buzzword tossed between TV producers and newspaper editors alike. Call it a concern, a crisis or something else altogether, what I will say is that my own student debt has made me think terribly hard about my career intentions and opportunities. (Washington Post, “Is the $1 trillion student loan debt really a crisis?”, 05.01.14)
To begin, I will share my personal opinion that it is a tad ironic to hear such older, authoritative voices on why or why not student loan debt should keep us up at night. For starters, it’s a selfish observation by these writers. The chief reason many op-eds emerge to discuss student loan debt is because there’s a fear that this is leading to a bubble—and like all bubbles, there will be a day when they deflate, or even pop. The concern is not what will happen to us students that make up the $1 trillion-plus total debt, but instead how it will swing the economy into recession. By extension, concerns are also rampant about how we will be able to buy cars, houses, and continue to invest in our economy with all this debt—especially as Baby Boomers retire. Again, this is another example of selfish worry.
But I concede this is true for speculation about every industry. Whether it’s about a new dot-com bubble, another housing bubble or some other balloon-like structure, speculation will always come amid growth about the coming economic fall. It’s all selfish observations—based on the fear of how the mistakes of others, or our big economic machine, will affect what we can put on the table—but there’s a huge difference between these crises and the one with student loan debt: Bankruptcy.
Bankruptcy, legally and financially speaking, is a way out for those with huge financial burdens. However, it doesn’t exist as an option for those with student loan debt. The notion is that you can’t repossess the knowledge you obtained from education, but this approach is inherently a fallacy. I won’t go into the specifics of my own financial situation, but I can say that tuition is not necessarily the biggest cost of a higher education. If you’ve live on a residential campus like Vassar, but perhaps one with a less need-based financial aid process, you may receive a merit scholarship for tuition, but have to cough up room and board costs yourself. This is where your debt may emerge, and the irony here is that if it weren’t higher education, there’s no reason why these costs could not be absolved, in a desperate situation, through bankruptcy. Room and board may be the cost of being in college, but it is not the cost of your learning—merely how you choose to survive while you learn.
In a situation like this, I don’t see why bankruptcy is not an option for struggling students. It isn’t like such an option doesn’t exists for other debts that can’t be returned. Having medical expenses is a valid bankruptcy reason, and it’s obvious that they cannot undo your surgery or treatment. I’m not even saying perhaps all student expenses ought to be valid for bankruptcy—but the fact no costs can be absolved if you cannot find a job in your field seems absurd. It’s an expectation of privileges and accessibility that not everyone has.
As much as financial need helps at institutions like Vassar, not all schools do this, and if your debt were to pile up to $75,000 or more, paying off your loans within 10 years would be require car payments not unlike owning an SUV. The legal precedent however might soon change, especially if many students soon find their education debts too great a burden.
Bankruptcy aside, internships also become a serious barrier because of debt. I thought for a while about pursuing civil service opportunities in Washington D.C., but those dreams are long gone now that I’ve reconciled with the balance of my student debt. The vast majority of internships (such as through any branches of government) are unpaid because of ethics, so adding on a summers worth of living expenses—for the “learning” offered in an unpaid internship—is not an option.
I’ve written already about the irony of our nation’s capital not thinking about accessibility alongside ethics for opportunities in civil service, as well as the plethora of unpaid internships in the world, so I don’t think it needs explanation how difficult these opportunities are when you’re already burdened with four years of college expenses. For those looking to take on such an opportunity, this decision is far easier if a parent can help out with the cost of an apartment, with the groceries or myriad other expenses. It’s also easier to take on summer debt if you’re already, more or less, debt-free. It’s selfish for me to not think about a father back home who’s turning 61 this month. It’s selfish to not wonder about that fresh 30-year mortgage and a pair of parents not yet ready for retirement. It’s perhaps almost as selfish as those op-eds I’ll read in the business section about the fear of the next economic crash.
Bankruptcy is not meant to be some “easy way” to solve your debt problems. It’s a safety net for those who take a risk and end up losing in the game of capitalism. Allowing students to declare bankruptcy is not gaming the system. The concept that own a house’s worth of student debt means something has gone terriblyh wrong. At the very least, expenses related to higher education—such as room & board and other fees—ought to be on the table.
I also want to refer back to all those things Baby Boomers want us to own once they retire. As much as it’s a selfish worry on their end, I myself also worry about whether my life’s work will result in a mortgage or merely a generation of rent receipts. A mortgage on a home is also a guarantee of some equity, but the question of whether I can have a house, car or other substantial equity can’t begin until another, five-figure debt is resolved. This isn’t about me though, as it’s about the millions of students who will have far greater debts than their parents when entering the workforce. This has guided tough decisions in my lifestyle and opportunities, but will lead to even tougher ones as I slowly pay off the growing debt. When the economy demands I buy a car or house, I’ll have to ask for a pass, settling for rent receipts and a bus pass.
On the bright side, I’ll only have to wait until 2026, if all goes according to plan. Maybe along the way we’ll see action at a federal level toward this growing issue—especially as the Baby Boomer voice grows ever-more important, we’ll perhaps see action as concerns over student debt evolve from fear to outright panic. Bankruptcy isn’t the sole solution, but it’s a start to considering fiscal responsibility in a few years, rather than a state of unending, perpetual debt for the emerging youth.
—Joshua Sherman ’16 is an English major.