In this Saturday, Aug. 6, 2011 file picture, students attend graduation ceremonies at the University of Alabama in Tuscaloosa, Ala. The number of borrowers defaulting on federal student loans has jumped sharply, the latest indication that rising college tuition costs, low graduation rates and poor job prospects are getting more and more students over their heads in debt.
We need to start taking student loan debt seriously, both as a troubling moral issue and as a ticking economic time bomb. By some reports, student loan debt in the U.S. will exceed 1 trillion dollars this year, more than the credit card debt of all Americans.
A whole generation of young Americans is at risk in this excessive borrowing. They fall further and further behind in “servicing their debt” because they have no way to keep up with the payments as many of them are unemployed or underemployed. They will delay starting marriage and families; they dare not take the risk of quitting a paying job (if they have one!) and starting their own business to create jobs, and they certainly cannot save to buy a home. They are trapped.
Jesus teaches his disciples to pray, “And forgive us our debts, as we forgive our debtors.” (Matthew 6:12) Forgiving debt is a moral issue. Forgiving some of the worst of this student debt is crucial literally to save this American generation.
President Obama has recently taken steps to ease student loan debt burdens. But the problem is too big. Some of this student debt needs actual legislation to deal with the whole system of the debt as Robert Applebaum calls for on his Web site, ForgiveStudentLoanDebt.com.
Applebaum contends that executive orders can only do so much. It will take legislation that covers predatory practices as well as other changes to the way student loans are structured such as how interest is compounded. Applebaum also argues persuasively that forgiving student loan debt will stimulate the economy.
The kind of moral equality that Jesus asks us to pray for in the Lord’s Prayer can be seen in Applebaum’s argument. Jesus calls on us to pray, “Forgive us our debts, as we forgive our debtors.” Forgive and be forgiven. Americans are tied together in this student debt debacle, and debt forgiveness will help the forgivers as well as those forgiven.
The American economy is also trapped in this cycle of more student borrowing and the mounting student loan debt. ‘Is this the next big credit bubble?’ asks The Economist. What happens to our fragile economy when this next house of cards comes tumbling down?
The #Occupy movement is part of this student debt crisis, both in terms of those who owe, and how some may choose do deal with their debt unless Congress acts responsibly.
Ask yourself, who’s at all the #Occupy camps? Well, some of those behind #Occupy are graduates with two and three degrees and no job. I met some of them on Michigan Avenue recently, walking the same way I was, toward a jobs rally at #OccupyChicago. Each young person had a hand-lettered sign around his or her neck. The signs said simply, $45,240, or $67,125, or even $102,000. They were wearing their outstanding student loan debt around their necks. They were heading to the jobs rally and #OccupyChicago.
Stef Gray is a recent graduate who can’t find any kind of job, is underwater on her student debt, and she’s trying to draw attention to her painful story. and the stories of others like her who are actually living merely as slaves to their debt. She calls this OccupyStudentDebt. Her story helps explain why student debt is such a catastrophic issue for young graduates.
Unveiled just before Thanksgiving, a national Occupy Student Debt campaign kicked off, asking borrowers to sign a debtors pledge to default on their loans after one million individuals have also pledged to default.
Default is not debt forgiveness. “Don’t Be a Dupe. DO NOT pledge to voluntarily default on your student loans,” Applebaum pleaded on Thanksgiving weekend. His view is that this ‘default in a huge group’ sets up a false sense of security, i.e. you’ll be with a million others and be protected somehow from the very serious consequences of default. You won’t. It’s also a false logic, says Applebaum, to think more defaults will result in substantive change in this student loan system when the currently already high rate of defaults has not done so. Applebaum is circulating a petition for signatures to deliver to President Obama and Congress to immediately forgive all student debt.
None of those calling for action on mounting student loan debt debates that there is a crisis. The division is over how to act: call for legislative action, or take action yourself. Those graduates I talked to on Michigan Avenue are being hurt from the huge burden of their debt, and they were despairing that their elected representatives would actually do anything to help them.
Currently, I’m advocating debt forgiveness. It is the moral thing to do and it is the right civic thing to do. This is what Jesus actually meant; real debts, real debtors, forgiving and forgiven. This is what government is actually about—of the people, by the people, for the people. We still have a chance to show young people that democracy can work for the common good.
Forgiveness. It’s the right thing to do.