Forgiving college loans - an alternative

I guess I’ve concluded that it’s wrong to generalize as if there is a single group called “college grads.” In reality, we have at least two different classes of college students and college grads. One group is secure students and grads — those who came from middle-class homes and have some resources as they go from campus into adulthood.

The other group is the precarious students and grads. Over the past few decades, America has done a much better job of getting less-affluent students through high school and into college. These folks are seizing the chance to make the big leap into the middle class, but they have few resources and no margin for error as they make that leap. David Brooks, We Should Cancel Student Debt, but Only for Some, NYT, May 5, 2022

I sometimes joke that anyone who racks up a huge college loan debt may not have been smart enough to go to college in the first place. Perhaps at heart, I am not a very kind person.

College loan forgiveness is a hot political topic right now. And like with most political topics, I love finding the “radical center” which will piss off the highly opinionated on both sides of the debate. 

I get both sides. Rising college costs, often driven by decreased public (tax) support, have hurt recent grads' ability to buy houses, start families, etc.  On the other hand, much of this debt being paid for with our tax dollars helps those in income brackets who least need government support. (Brooks in the column quoted above reports that “the wealthiest 20 percent of households owe almost a third of all student debt. The bottom 20 percent owe only 8 percent.”

I don’t mind my tax dollars going to pay off some student college loans. There should be a cap and the forgiveness should only be for those making or coming from households with modest incomes. (Like teachers, nurses, etc.)

But I have another suggestion based on the forgiveness of a college debt I once held.

When starting my undergraduate degree in 1970, I applied for and was given a National Defense Loan. For $500. In 1970, $500 was nothing to sneeze at. I used it to help fund my first semester of my freshman year at the University of Iowa - the only semester of college during which I did not have a job. It was the first, last, and only government financial aid I ever received in college. (I did once have to borrow $600 from my dad for an unexpected car repair, but that’s another story.)

I finished my undergraduate education at the University of Northern Colorado. I had worked in Colorado for a full year before starting there so I received in-state tuition. As I recall, fees and tuition each quarter were a bit less than $150. Married student housing was less than $100 a month. I drove an old clunker car and rode a used bicycle. There were no cell phone bills, no cable TV bills, no Internet bills, no five dollar lattes, or $200 sneakers. Groceries were about $10 a week including cigarettes at 25 cents a pack. By working 42 hours a week at a slightly higher amount than the then $1.60 an hour minimum wage, I could pay for my education as I went. I had the National Defense Loan repayment deferred until after graduation.

It was when I started my teaching career that  I was the recipient of governmental largess - I only had to repay $300 of that $500 loan. As it turned out, my first teaching job was in a small school district in rural Iowa that qualified as an economically depressed area. And if one worked in a school in an area so identified, 20% of one’s ND loan was forgiven each year of work. Thank you taxpayers from the 70s! I didn’t know this was a “benefit” of working for the school. Given the tight job market for teachers in 1976, I was just damn happy to have a job in my field.

I could get behind a similar program to help recent grads “repay” their debts - through some form of service - regardless of personal wealth. Serving in the military, teaching in K-12 education or preschool, working on medical, police, or firefighting frontlines, providing social services in poor parts of our country, could all lead to loan forgiveness. It is human nature to place less value on the things we are simply given as opposed to those things we earn. College degrees among them.

Quite honestly, I still don’t understand how college students can rack up college debts in hundreds of thousands of dollars. I suspect unscrupulous for-profit colleges and loan providers are a large part of the problem. And the unfortunate delusion that private, high cost colleges guarantee a better job and better salaries than lower cost public colleges or training in technical fields. (See my opening joke.) So along with looking at bailing out grads with high student debt, are there funds being dedicated to teaching students how to avoid getting into such a pickle in the first place?