At nearly $2 trillion, US student loan debt is a time bomb and families deserve relief.
Student loan debt in the United States is an unmitigated disaster. Jon Oberg, a leading expert on higher education policy and finance, a former Department of Education employee, and whistleblower on the 9.5% scandal, says “deceptions of borrowers by lenders, accompanied by loan servicer misrepresentations, have long plagued federal student loan programs.” It’s a crisis that continues to spiral out of control. Currently, outstanding student loan debt stands at a whopping $1.8 trillion, affecting some 43 million Americans and their families.
Who’s paying the price for that terrifying figure? The burden falls on large swathes of the U.S. population, and it isn’t just the borrowers, as well as their co-signers, of the student loans but also the taxpayers, all of whom have to contend with that ever-ballooning figure of debt. In public discussions, the borrowers are always the targets of criticism. That criticism and outright rage is misdirected. Instead, it should be directed at the culprits of this crisis: the lenders, the servicers, the universities, the enrollment management companies, and, yes, Uncle Sam.
I’ve spent years cultivating deep relationships with people struggling with their student loans. My blog, All Education Matters, which I launched in the summer of 2009, has been archived by the Library of Congress. My book, Solving the Student Loan Crisis: Dreams, Diplomas & A Lifetime of Debt, was published in May 2016. The crisis of student loan debt is something I’ve studied intensely for a long time. After listening to the stories of people victimized by a labyrinthine debtor system and learning about how student debt impacts their lives, I’ve come to the conclusion that student loan debt should be wiped out. A student debt jubilee is necessary.
A student debt jubilee would entail the complete cancelling of outstanding debt, regardless of its status—whether the loan is in repayment, deferment, or defaulted. Deleting this debt for good would positively impact millions of people. As a result of their debts, students suffer from grief, anxiety, and despair. The student debt system unfairly subjugates people to a financial industry that strips US student loan debtors of their freedom, and hurts people in marginalized communities. Such a system that causes so much grief for so many people and which exists only for the profit of a few shouldn’t exist.
Just as debt is not a new concept, neither are debt jubilees. In fact, they’ve existed for thousands of years. Obviously, this suggestion is only one part of solving this crisis, as a problem of this proportion requires a multi-faceted approach to resolve it. To be sure, the cost of higher education must be reduced. That said, my concern is, and always has been, for the borrowers who have already left higher education institutions, whom no one goes to bat for. They also deserve a voice at the table.
Those following the recent events on the student loan crisis, are aware that the Biden administration has taken the initiative to forgive loans for groups of student loan debtors who were defrauded by numerous for-profit universities that they attended. Just last month, the administration forgave the loans of 200,000 borrowers, which amounted to $6 billion. In addition, President Biden has announced a major loan forgiveness plan, which entails loan forgiveness of $10,000 for millions of borrowers, and $20,000 for Pell Grant recipients, the stipulation being that an individual is earning less than $125,000 a year or $250,000 a year as a couple. Mathematically speaking, this move doesn’t even make a dent in that 2 trillion dollar figure. That said, it is a step in the right direction, and it’s something I never anticipated in my lifetime. Biden deserves praise for this move, as it is an actual plan that helps lower-income Americans. However, student loan debtors need far more relief than that: a debt jubilee is the only way to go.
For those readers only concerned about the economy, and not the financial plight and psychological suffering borrowers are currently experiencing with crushing debt, there is plenty of evidence that wiping out student debt altogether would lead to an immediate infusion of capital back into the pockets of millions upon millions of Americans. The borrowers who are currently sending gobs of money to loan servicers to prop up a gluttonous industry would use that capital for more and bigger purchases, including homes, and cars, and that would be a boon to the economy.
Until student loan debts are entirely forgiven, my mantra will continue to be: student debt jubilee now!
CRYN JOHANNSEN, formally the Founder and Executive Director of All Education Matters, Inc., is the author “Solving the Student Loan Crisis: Dreams, Diplomas, and a Lifetime of Debt” (New Insights Press, 2016); available on Amazon.
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We Should Cancel Student Loan Debt
At nearly $2 trillion, US student loan debt is a time bomb and families deserve relief.
Student loan debt in the United States is an unmitigated disaster. Jon Oberg, a leading expert on higher education policy and finance, a former Department of Education employee, and whistleblower on the 9.5% scandal, says “deceptions of borrowers by lenders, accompanied by loan servicer misrepresentations, have long plagued federal student loan programs.” It’s a crisis that continues to spiral out of control. Currently, outstanding student loan debt stands at a whopping $1.8 trillion, affecting some 43 million Americans and their families.
Who’s paying the price for that terrifying figure? The burden falls on large swathes of the U.S. population, and it isn’t just the borrowers, as well as their co-signers, of the student loans but also the taxpayers, all of whom have to contend with that ever-ballooning figure of debt. In public discussions, the borrowers are always the targets of criticism. That criticism and outright rage is misdirected. Instead, it should be directed at the culprits of this crisis: the lenders, the servicers, the universities, the enrollment management companies, and, yes, Uncle Sam.
I’ve spent years cultivating deep relationships with people struggling with their student loans. My blog, All Education Matters, which I launched in the summer of 2009, has been archived by the Library of Congress. My book, Solving the Student Loan Crisis: Dreams, Diplomas & A Lifetime of Debt, was published in May 2016. The crisis of student loan debt is something I’ve studied intensely for a long time. After listening to the stories of people victimized by a labyrinthine debtor system and learning about how student debt impacts their lives, I’ve come to the conclusion that student loan debt should be wiped out. A student debt jubilee is necessary.
A student debt jubilee would entail the complete cancelling of outstanding debt, regardless of its status—whether the loan is in repayment, deferment, or defaulted. Deleting this debt for good would positively impact millions of people. As a result of their debts, students suffer from grief, anxiety, and despair. The student debt system unfairly subjugates people to a financial industry that strips US student loan debtors of their freedom, and hurts people in marginalized communities. Such a system that causes so much grief for so many people and which exists only for the profit of a few shouldn’t exist.
Just as debt is not a new concept, neither are debt jubilees. In fact, they’ve existed for thousands of years. Obviously, this suggestion is only one part of solving this crisis, as a problem of this proportion requires a multi-faceted approach to resolve it. To be sure, the cost of higher education must be reduced. That said, my concern is, and always has been, for the borrowers who have already left higher education institutions, whom no one goes to bat for. They also deserve a voice at the table.
Those following the recent events on the student loan crisis, are aware that the Biden administration has taken the initiative to forgive loans for groups of student loan debtors who were defrauded by numerous for-profit universities that they attended. Just last month, the administration forgave the loans of 200,000 borrowers, which amounted to $6 billion. In addition, President Biden has announced a major loan forgiveness plan, which entails loan forgiveness of $10,000 for millions of borrowers, and $20,000 for Pell Grant recipients, the stipulation being that an individual is earning less than $125,000 a year or $250,000 a year as a couple. Mathematically speaking, this move doesn’t even make a dent in that 2 trillion dollar figure. That said, it is a step in the right direction, and it’s something I never anticipated in my lifetime. Biden deserves praise for this move, as it is an actual plan that helps lower-income Americans. However, student loan debtors need far more relief than that: a debt jubilee is the only way to go.
For those readers only concerned about the economy, and not the financial plight and psychological suffering borrowers are currently experiencing with crushing debt, there is plenty of evidence that wiping out student debt altogether would lead to an immediate infusion of capital back into the pockets of millions upon millions of Americans. The borrowers who are currently sending gobs of money to loan servicers to prop up a gluttonous industry would use that capital for more and bigger purchases, including homes, and cars, and that would be a boon to the economy.
Until student loan debts are entirely forgiven, my mantra will continue to be: student debt jubilee now!
CRYN JOHANNSEN
CRYN JOHANNSEN, formally the Founder and Executive Director of All Education Matters, Inc., is the author “Solving the Student Loan Crisis: Dreams, Diplomas, and a Lifetime of Debt” (New Insights Press, 2016); available on Amazon.
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CRYN JOHANNSEN, formally the Founder and Executive Director of All Education Matters, Inc., is the author “Solving the Student Loan Crisis: Dreams, Diplomas, and a Lifetime of Debt” (New Insights Press, 2016); available on Amazon.