One hundred and thirty-five billion dollars. That is how much the four largest student loan programs plan to make on students in the next decade. One hundred thirty-five billion dollars.
Millennials are hard-pressed to find an issue that weighs on their minds as heavy as impending student debt. With students paying off loans for 20 plus years after graduating college or grad school, it is a cross many have to bear well into their professional lives. What exactly is the issue with all of this student debt these days?
It is a double-edged problem. First, the costs of private and public institutions of higher education keep rising every year with no indication of slowing down, and second, the government is profiting off of these student loans and no one has seemed to be able to do anything about it. In the early 1980s when my father was attending Johns Hopkins Medical School he paid, on average, $2,000 a semester. Today, in 2015, the average cost of a semester at Johns Hopkins is $5,906.25, according to U.S. News.
That is almost a threefold increase in 30 years, and that does not include application fees, books, and other supplies necessary to take classes there. In another 30 years it could cost $12,000 per semester for medical school? Yikes. This is not only occurring at medical schools, either. Undergraduate universities, law schools, and other graduate schools all over the country have seen drastic increases in tuition in the past three decades, and no one bears the brunt of these cost increases more than the millennial generation.
Working to put yourself through school and surviving with minimal debt is a thing of the past.
Mark Bowen, an Indianapolis resident and father of three, describes the fear of a father who realizes his daughters will go into their adult life with debt: "Of course I do not want them to have large loans to pay off, but realistically I'm not sure we can prevent that from happening at this point. With there being three of them in college at the same time, and my lack of huge savings, the options are very limited. I hope they can earn some scholarships, but we can't really depend on that."
He has a good point, other than loans and substantial scholarships, there are not that many options out there for students. Even when students earn merit scholarships, they are usually only applicable to tuition-based costs, leaving students to pay for living expenses and other expenses by themselves. Taylor Mattingly, a 19-year-old Purdue student, earned a scholarship to Purdue, but still had to take out a loan to pay for living expenses. "Even though my tuition is paid for, I still have to worry about paying off a loan after I graduate. I had hoped that the scholarship would be enough, but it won't cover all of my non-tuition costs," she worries.
On the other side of the issue, no one is making it easier for us to go to school on borrowed money. Student loans are no longer just an investment in the future of the country, but a way to make billions of dollars to help reduce the national debt. They are looking to millennials and their impending financial struggles to solve problems we had no responsibility in making.
In an article published in Time Magazine, it was explained exactly how this happens. The government can borrow money at roughly 2 percent interest, yet they charge students rates anywhere between 4 percent and 12 percent, tending toward the higher side of this range. Even if we assume that some students will default on their loans, this leaves student loan markets way into the black. That's disgusting. Senator Bernie Sanders pointed out that you can refinance your home at 5 percent or 7 percent interest, yet students that are just starting their lives are being charged 12 percent interest on their huge loans. That seems like a system that is largely out of whack. If something doesn't change soon, many members of an extremely promising generation are going to have their potential cut short.
Why does any of this matter? This issue is going to be a huge deciding factor in mobilizing the vote of students in the 2016 presidential election. Student debt hastily became one of the foremost issues on the candidates minds, with many of them, both Democrat and Republican, discussing it in the announcement of their candidacies. In the first GOP debate, questions about what candidates plan to do about decreasing student debt appeared within the first 20 minutes. Millennials are demanding answers, and we won't stop until we get them. What are the candidates thinking? Here's a brief overview on where the most outspoken candidates from both sides stand on the issue.
Hillary Clinton: Clinton advocates for a system of government spending that would give money to the states so that they could ensure that a large portion of their students would not have to take out loans to attend public four-year colleges and universities. According to The New York Times, a third budget proposed by her plan (about $12 billion a year) would go towards debt relief. The rest would go toward reducing the interest rate on student loans and eliminating the need for students to take out loans in the first place. The total proposed spending on this program is $350 billion over 10 years.
Bernie Sanders: As a self-proclaimed socialist, many can guess what his plan would include: totally free public institutions of higher education. Sanders proposes that America makes Wall Street pay for some of the $70 billion that public universities charge students each year. By creating a tax on financial transactions, including stock, bond, and derivative trades, Wall Street would pay for almost $30 billion of the tuition tab. Sanders says that the rest will come from the states. This plan, theoretically sounds wonderful but the implementation in Washington would be tricky at best.
Donald Trump: His opinion may surprise you. In an interview with The Hill, Trump was quoted as slamming the government for profiteering off of student loans, saying, "Right now, it's not fair. It is one of the only places, frankly, where our country actually makes money. And they make a lot of money. And that should not take place." Like so much of his campaign thus far, he is all talk. While he staunchly disagrees with profiteering off of student loans, he has yet to offer a solution to the problem.
Ben Carson: His stance is essentially "too bad for you if you can't afford college," paraphrased loosely. He has pointed out multiple times that it is not the government's job to assist students in paying for higher education, and that programs such as Pell Grants are already in place to assist the country's poorest students. It was published in the Huffington Post that he said, "I have a four-letter solution [to the problem] that works extremely well, it's called w-o-r-k, work."
Marco Rubio: Rubio has arguably been the most vocal Republican candidate on the issue of student debt. He has, in the past, backed income-share lending to fund education and pushed for the expansion of online education. Last year, he introduced (with other Republican Congressional members) a plan that would simplify the process of loan repayment and attempt to keep exorbitant interest rates in check. The plan, as described in the Washington Post, would automatically deduct 10 percent of the loanee's earnings each month.
As you can see, free (or nearly free) public education has been a banner raised by the Democratic party. Both Sanders and Clinton will run on platforms that include some sort of program for lessening the current debt held by millennials, and decreasing the need for student loans for future students. The Republican candidates are more spread out when it comes to this issue and it is hard to tell if some are just putting on a show to attract the younger generation of voters.
One thing can be said for sure, Carson and likeminded candidates are going to have a hard time mobilizing the youth vote with their opinions on higher education. As the debates continue and the election draws nearer and nearer, the youth of American are going to play a vital role in who is elected the next Commander-In-Chief, and the issues that may not have seemed very important are going to be at the front of every young voter's mind. The bottom line is that education is absolutely necessary in the advancement of our country, and when we have a huge portion of the American population that feels marginalized and disadvantaged because of their limited access to such a necessity, a political revolution of sorts becomes entirely possible. This election will be one for the youth.
