The Unexpected Problem of Student Loans, PART 2
What is the goal of college?
Is it to create well-rounded, thoughtful adults? To teach youthful teenagers the responsibilities and sorrows of adulthood? To build up intelligent workers for the labor force? To further the goal of empirical research? Or to fund the federal government with trillions of dollars of student loan interest?
Your opinion may be different from mine, but it was always my understanding that the goal of college is to come out of it ready to contribute meaningfully to the economy. This is why we have in-state/out-of-state tuition, no? This is why we tie the names of majors to job descriptions, such as "Engineering," as opposed to "Fiddling with Electrical Bits." This is why kids are pushed to study STEM majors while parents and friends warn against the language arts majors, which are "useless" because they do not lead directly into a high-power career. This is why we have student loans in the first place, because the assumption is that, by getting a degree, you will become a profitable member of the economy and be able to pay back your loan with interest.
Last year, I talked about the unexpected problem student loans create with financial responsibility (to read more, click here). This year, my thoughts and experiences have lead me to the Second Unexpected Problem of Student Loans: You cannot contribute to the economy for shit.
Work? Forget about it. You have so much debt, you take any job you possibly can and (surprise, surprise!) since so many other people your age ALSO have that shiny undergraduate degree, you are worth no more to your employer for it. You are still making minimum wage, pal, and sorry that's still under $15 per hour. Enjoy your cheap fast food.
Investment? What is that? Although I have had far more opportunities to save money, and chosen not to, than many other adults in my age group, 66% of millennials say they will be relying on their savings account in the future, not investments. Our money is sitting in our accounts, if we have any extra, and not doing anything to help the economy. This is probably a smart decision on our part, considering that 401K is probably going to be useless to us by the time we're eligible to cash out. And remember those lovely student loans? Yeah, turns out even if you get loan-forgiveness after 20-25 years of payments, you have to pay TAXES to the federal AND state governments on that forgiveness as "income"--meaning your savings account better have that money on hand or you're going back in debt.
Exemplary employees? Ha! This week, I admitted to my employer that I need to shift my schedule earlier in the day because I do not get paid enough and need to make it to my afternoon tutoring sessions to offset the costs of living, eating, and paying off debt. Apart from not being able to buy anything other than my necessities (a decision I made to get out of credit card debt), I do not contribute very well to the other side of the economy either: that of labor. I am discouraged from working any harder at a job that barely supports me, where raises are unheard of even to offset market inflation, and my coworkers are so overburdened that they cannot spare time to train me to take over more tasks and possibly get a better position. Debt is a burden which forces me to diversify my income, rather than excelling in one particular area.
Frivolous Spending? Don't make me laugh. It may seem, from the way public opinion portrays us, like millennials are always spending their money on fancy coffee, avocado toast, and other unnecessary expenses. I become incandescent with anger and frustration when I hear these kinds of critiques. For one, because ECONOMY IS BUILT ON FRIVOLOUS SPENDING!! How many places around you right now are selling things that you actually need? But see that minimum-wage worker behind the counter? See how far away that burger or paper product had to travel to get to you? Millions, maybe trillions, of people rely on your frivolous spending to fund their lives. Should millennials stop buying anything not-needed until their loans are paid off? Okay, see you in 25 years (or actually more with that damn tax bill).
Second reason I hate the critique on millennial spending? Have you actually looked at what we're buying? Coffee, food, travel, and rent. Coffee, to keep us awake and alert while we run between 2-3 jobs to keep on top of our expenses. Food, because cooking at home when you are hardly ever there is strangely difficult... weird, right? Travel, because we care more about expanding the places we've been than the places we own. And rent, because if you want to secure your dream, you have to go where the dream is, and right now that is in big cities where rent is soaring as a result of rampant luxury-condo construction and the absence of any affordable housing options. Do millennials live beyond their means? Yes, often so. But without viable options to live within their means, what else is there? It makes me literally feel sick when I see what the upper-middle and upper classes are spending their money on while millennials are criticized for trying to survive in a market that has left them in the dust.
Student loan debt is a 1.41 trillion dollar problem which has the unexpected problem of keeping millennials from truly engaging in the economy. I am not an economist, but I can't imagine that an entire age group's struggles will fail to have lasting impact on our society. My only hope is that the lasting impact will be free higher education, which will allow future generations to follow their passions in education, rather than wrongfully believe--as I did--that a degree is meant to provide financial security.
What are your thoughts on the student loan debt issue? Do you think students should be able to pursue creative academic disciplines without the guilt of loan repayments? In our large and sprawling country, will a tuition-free education system work for us, as it has in smaller countries? Share your thoughts in the comments below.
BONUS: Did you know that the United States has some tuition-free schools already? If you are interested in pursuing your educational dreams but balk at coming under the burden of student loan debt, see if one of these schools might work for you! Alternatively, MissionU has a tuition system where you pay based on the income you make after earning your degree, not the other way around! Or, if these seem too out-there, here is a list of schools whose students borrow slightly less than the average $27,975.