by CHRIS BROWN
“An investment in knowledge pays the best interest.” – Benjamin Franklin
Why should you care about student loan debt in America? Perhaps you don’t have student loans, but it’s likely someone you know and love does. Education has long been seen as a great investment, both for the individual and for society at large. It’s supposed to assist with the fulfillment of the American Dream. It's supposed to create a pathway into the middle class. Unfortunately, that investment no longer seems to be paying the dividends it once did, and the problem may now be doing more harm than good for many in the middle class.
Student loan debt has been around for decades, why is there so much talk about it now, and why are so many people calling for forgiveness or cancellation of debt? The answer is that the issue is not the same as it used to be.
Total amount of student loan debt in the U.S.: The latest student loan debt statistics for 2022 show that there are 45 million borrowers who collectively owe approximately $1.7 trillion in student loan debt. (A record high!) Student loan debt is now the second-highest consumer debt category — second only to mortgage debt and higher than debt for both credit cards and auto loans.
Student loans are preventing people from achieving life milestones: How bad is it? The National Association of Realtors commissioned a report on the issue, because student loans are preventing Americans from buying homes (another important marker of a middle-class lifestyle and the American Dream)! Half of people who haven’t yet purchased a home point to their student debt as a reason for the delay.
The rise in education costs is far outpacing the rise in wages: According to a Georgetown analysis of U.S. Census, Bureau of Labor Statistics and National Center for Education Statistics data for the years 1980 to 2019, college costs have increased by 169% over the past four decades — while earnings for workers between the ages of 22 and 27 have increased by just 19%.
What does all this mean? It means you can no longer “pay your way” through college the way many people were able to in the 1970’s and 1980’s. It also means you may have to choose between getting a college education, buying a home, and saving for retirement.
What are some possible solutions? This is where things get tricky, as this is a very complex issue. Check back soon for some possible solutions the Democratic Party can discuss and work towards.