Student Debt
In order to understand student debt in the United States, we need to know its history. For this nation’s first decades, college was limited to a wealthy few. But quite early on, some important founders argued for free higher education. In 1822, for instance, James Madison wrote that “the liberal appropriations made by the legislature of Kentucky for a general system of education cannot be too much applauded….Enlightened patriotism…is now providing for the State a Plan of Education embracing every class of Citizens.” Madison and others of his era probably relied on Adam Smith’s arguments in favor of free public education. In his influential book, The Wealth of Nations, published in 1776, Smith argued that a nation’s wealth lay not in its gold or silver, but in an educated labor force. One of the state’s few functions “in a civilized and commercial society” should be providing institutions “for promoting the instruction of the people” so that “even a common labourer may afford it.”
This view was greatly strengthened in 1862, when Pres. Lincoln signed the first Morill Act. This law gave federally controlled land grants to the states, so that they could sell them to fund “land-grant” colleges. Throughout the nation, these colleges became large public universities. They were either completely free to students or charged a nominal fee, like $20.
My own institution, the City University of New York (CUNY), was free from its inception in 1849 through the Great Depression of the 1930s and into the 1970s. But then things changed. Ronald Reagan believed that “students are spoiled and don’t deserve the education they are getting.” His advisor, Roger Freeman, declared, “We are in danger of producing an educated proletariat….That’s dynamite! We have to be selective on who we allow [to go to college].” Reagan imposed tuition on the University of California when he was governor. As president, he urged others to follow suit. In 1976, CUNY imposed tuition for the first time in its history. Other public universities did the same.
The result was both higher salaries for professors, who traditionally were poorly paid, and rising student debt. Today, student debt in the United States has reached a whopping $1.75 trillion. 48,000,000 Americans have student debt; the average amount is almost $30,000 apiece. 87% of them make less than $75,000 a year. Like all debts, its interest is compounded, so that those who owe end up paying far more than what they originally borrowed.
Fulfilling his campaign promise, Pres. Biden recently reduced this debt to some degree. For Pell Grant students, that is those with incomes of less than $60,000, $20,000 of debt is cancelled. For students with incomes up to $125,000, $10,000 of debt is cancelled. Those with higher incomes get no relief. 80% of the current recipients of debt cancellation earn less than $75,000. There is a racial component as well: a majority of the lower income students are black.
For someone like myself, who wanted all student debt cancelled, this is only partial relief. But to others, this is much too much. A dear relative of mine recently wrote on Facebook: “People cry, ‘My body my choice.’ Well I say ‘Your student loan, your payments.’” However, I believe the two situations are not comparable. My body is integral to my identity and I cannot change it. Student debt is more like taking out a mortgage. If mortgage rates decline, no one condemns the people who then pay lower rates than they did. Your relief should not cause me pain. Part of Biden’s plan holds colleges accountable if they simply raise prices. And borrowers who work in the military, government, or in a non-profit receive more credit toward loan forgiveness. Many of the politicians who condemned this relief received far more money under the Paycheck Protection Program (PPP). They never criticized that.
Almost every other advanced nation provides free college tuition (and free health care, but that’s another issue). As Adam Smith argued so long ago, the “education of the common people requires…the attention of the public.” It can only improve our nation, both in itself and in competition with others.