As graduation season swings into high gear, a new economic crisis confronts thousands of this year’s high school and college grads — crushing college student loan debt.
America’s student loan debt recently reached the $1-trillion mark. That’s more than our total credit card and other consumer debt.
Ninety-four percent of the students who get a college degree take out these loans, up from 45 percent in 1993, according to The New York Times. The average college grad is saddled with more than $20,000 in debt by the time she dons her cap and gown. This is a tremendous burden for young graduates, many of whom are having trouble landing that first job.Faced with the prospect of even more debt, many delay plans to attend graduate school. And for those lucky enough to find work, high monthly student loan bills may mean working two jobs or moving back in with mom and dad. While everyone agrees that a college education is the pathway to greater success in America, student loan debt is leaving too many graduates stalled at the starting gate.
“Higher education can’t be a luxury,” says President Barack Obama. “It is an economic imperative that every family should be able to afford.”
Recognizing the relationship between education and economic growth, Obama has made boosting America’s lagging college graduation rates one of his top priorities. It’s no secret that rising tuition costs are a major cause of stagnant or declining graduation rates, especially in communities of color. Currently, Obama is urging Congress to renew a 2007 bill that lowered the federal student loan interest rate from 6.8 percent to 3.4 percent. If Congress fails to act, the current rate will double by July 1, increasing the average student debt burden by $1,000 over the life of the loan.
The irony of this debate is that both sides in Congress support an extension of the 3.4-percent rate. But like earlier fights over raising the debt ceiling and extending the payroll tax cut, lawmakers are arguing over how to pay for it. Senate Democrats would cover the $6-billion cost of the bill by closing some tax loopholes on high earners. Republicans continue to balk at any perceived tax hikes on the richest Americans and have made a counter-proposal to cut funding for a preventive health initiative that is part of Obama’s Affordable Care Act.
On the very day that student loan debt reached the $1-trillion mark, Senate Republicans blocked a vote to extend the 3.4-percent interest rate on student loans for another year. It reminded me of an old African proverb: “When elephants fight, the grass suffers.” Thousands of low-income students and their families are suffering while the two sides in Congress engage in ideological warfare.
College graduation is as important to our national security as a strong military. But when it comes to funding, education seems to always take a back seat to war. How much would graduation rates for African Americans and Latinos rise if they did not have to overcome the added economic barrier of high student loan debt?