OK Friends Boomers, I understand. When we went to college, we didn’t need government guaranteed loans. Our parents gave us little or nothing, but we worked two or three jobs and paid for our own expenses. What’s wrong with this generation? They took out a loan, they should pay.
Well, my freshman tuition at the University of Minnesota was $125 per term. Three quarters (the standard year) therefore cost $375. According to the American Institute for Economic Research, in today’s cost of living dollars, that would be $3,413.69. It would be reasonable.
However, tuition for the U of M College of Liberal Arts is actually $16,108 today. So what justifies the difference of $12,694.31? This is largely due to the current lack of government funding. Yes, in the 1960s and 1970s both the federal and state governments funded huge portions of public college tuition. I didn’t need a loan from the government because the government prepaid.
It was the time when our country valued education. It created a better society. California’s public colleges were free, and most public schools were well-funded. Governor Wendell Anderson was on the cover of Time magazine holding a northern pike with a caption touting “The Good Life in Minnesota.” Anderson, along with a Republican-controlled legislature, passed a law known as the “Minnesota Miracle,” which dramatically raised taxes and increased funding for local schools.
We ended up with a workforce that was the envy of the entire country and a lifestyle of recreation, sports, and the arts that nearly made up for our harsh winters. The magazine article praised Minnesotans for being civic-minded citizens who supported shared sacrifice “in exchange for good services and social benefits.”
This has changed. In the 2000s, when my kids went to college, I was shocked at how much the tuition had gone up. Then I was more horrified by how easily they were offered loans online. These loans not only covered tuition, but included substantial cash for room, board, books, and various living expenses. It was far too easy to get large loans. These easy-to-obtain loans were good business for lenders and for colleges, but not necessarily for students.
Looking back, realizing that most of my college education was paid for with taxpayers’ money, I can’t really complain about the Biden administration’s loan repayment program that helps lower- and middle-class students. reduce their debt burden.
Admittedly, I don’t have much sympathy for students who have borrowed far too much money for an overpriced education. But capping loan forgiveness at $10,000, or $20,000 for Pell Grant recipients, seems like a reasonable cap.
Some of my friends complain that it’s just not “fair”. What about the guy who just paid off his loan and now he gets nothing? Well, timing has always been crucial.
What about people who were in the process of getting a mortgage when rates went up? What about the people who died early in the pandemic before vaccines became available and treatment methods improved? What about students who graduated when the economy was booming versus those who graduated during the recession of 2009? Yes, some things just aren’t fair, but should everyone continue to suffer because we refuse to change a dysfunctional system?
Then there are all the budding economists complaining about rising inflation, taxes, debt, or the deficit. But I’ve noticed that these parlor economists only complain about government spending when they don’t like the program. How can we assume that tax breaks for the rich stimulate the economy while investing in people does not?
We subsidize industries like oil, agriculture, housing and automobiles. We have given billions of dollars in subsidies to the oil industry even though it is making record profits. We enable individuals and businesses to declare bankruptcy and obtain the cancellation of their debts. We recently forgave loans to some very wealthy people, and even congressmen, under the Payroll Protection Program. Yet some of these same people are complaining about the cancellation of student loans.
I may have been a fool for helping pay off my kids’ loans. They miss that free money. But, overall, I’m happy with the program. It’s not a blank cheque. The program provides a limited amount of relief targeted to low- and middle-income borrowers with income caps. All in all, it will give many young Americans a boost to get on with their lives.
The real challenge is to look to the future. The current debt relief program is a band aid, it does not fix the system.
A high school diploma isn’t worth much in today’s world. Some sort of ongoing training is almost essential. But the costs of post-secondary education are too high. These readily available, government-guaranteed loans allow colleges and lenders to control their costs. The system must change.
For me, anyone with the qualifications should be able to attend a university, college or public trade school at a reasonable price. There is a huge societal benefit to having well-educated citizens and ensuring that educational opportunities are accessible to everyone, not just the wealthy. This is the much bigger problem that has yet to be solved.
Rochelle Eastman is a Savage resident who writes for Community Voices.