There was a fantastic article in the New York Times today--fantastic in that it laid bare the insanity of educational debt in the United States.
The author is 38 years old, and finished her schooling 14 years ago. She even had a full ride scholarship for undergraduate, but took on $78,000 of federal student loans to pay for a two year graduate degree. I'll let the author take it from here:
"I went to work as a freelance reporter earning just enough to keep the lights on. For three years, the maximum number allowed, I used economic hardship deferments. In 2010, I started monthly payments on some of my federal loans (I had 16 in all), while also paying off some private ones.
"But I just couldn’t get on top of them, even though I lived with roommates and, eventually, left freelancing for a full-time gig. The work was great — I spent my days reporting about science and producing live science events; I even met Stephen Hawking!— but, like most entry-level journalism jobs, it didn’t pay much. Plus some of my federal loans had interest rates as high as 8.55 percent. I began to flail.
"Sallie Mae, my main loan provider at the time, suggested forbearance: That meant my loan payments would temporarily be suspended without going into default. The accrued interest would be added to my principal. It sounded like a reprieve. It was actually a trap.
"And so, my principal grew. That forced my minimum monthly payment higher. Sometimes I’d attempt to pay for a few months, then get snowed under and go back into forbearance. Jobs with higher salaries at my level didn’t materialize, so I got thrifty: I borrowed rather than bought a laptop and recording equipment. I opted for free furniture and didn’t buy a car. I picked up additional reporting gigs for extra cash.
"Many nights, the growing debt paced the edges of my consciousness, keeping me awake. At the same time, I knew all the career success I’ve ever had has been a direct result of my education and the loans that enabled it.
"I continued to pay what loans I could, and for the rest, forbearance. Today, 14 years after my last day of school, I’ve paid $60,000 toward $78,000 of loans. Somehow, I am now $100,000 in debt.
"I have watched friends buy cars, houses, stocks. Meanwhile, every decision I make — what job to take, what raise to negotiate, what gifts to buy, what apartment to rent, when to tell whomever I’m dating about my debt, whether or not I can ever buy a piece of property, even if I should buy a new chair — is limited by this debt."
I weep for this young woman--this is crazy. It's worse than crazy--it is plain evil. We have crippled our young people's ability to form families, to have a bright future. And if this is not enough, housing prices are going through the roof. We are metaphorically killing our own children through these societal choices that rob them of their future.
I do not pretend to know all the solutions here. I can guess at some of them, such as discouraging out-of-state investors in the real estate market, and by prohibiting interest on federal student loans. But I don't know what to do for this young woman. I wish we could turn back time and beg her not to take out federal students loans (or any student loans for that matter) to fund her education . . .