JESSE JACKSON: Indenturing Our Young People
Jesse L. Jackson Sr., Special to The Informer | 5/6/2014, 11:20 p.m.
The young in America are being forced into cruel levels of debt, and this debt is already curbing their life prospects. Its economic effects are damaging to everyone. Yet with Washington frozen, the debt burdens on the young are likely to get worse.
For the young, a college education or post-high school professional training is the equivalent of what a high school degree was a generation ago. College is the necessary but not sufficient ticket to the middle class. For the nation, educating the next generation beyond high school is essential both for producing the citizens we need for a healthy democracy and for producing the work force we need for a healthy economy.
And yet college costs keep soaring, growing faster even than health-care costs. Government support for public universities and community colleges is down 25 percent since 2000. Students and their families must pay more and more of the cost. But family incomes have stagnated, failing to keep up with soaring costs of college, health care and housing.
The result is an explosion of student debt. It has nearly quadrupled since 2003, soaring to nearly a trillion dollars. Two-thirds of all students now graduate with debts averaging $27,000. The poorer the family, the higher the percentage of students with debt.
These debts are brutal; 12 percent are more than 90 days delinquent, but that figure is misleading because nearly one-half (47 percent) are in deferment (students can defer payment on their debt while in school, for example). That means nearly 1 out of 4 working loans are delinquent. Staggeringly, over 20 percent of loans for those 30-49 — in the peak of their earning years — are more than 90 days delinquent.
Because of the force of the bank lobby, student loans can’t be discharged with bankruptcy. They cannot be refinanced. They burden students for a lifetime. The feds will even garnish your Social Security to repay them.
As Slate contributor David Dayen argues, this is very much like indentured servitude that Americans suffered at the beginning of the Republic. Then impoverished workers and peasants traded years of labor for the cost of passage to the new world. For three to seven years, depending on the contract, they would labor, virtually like slaves, for masters who paid their way.
This injustice offends America’s tradition. Historically, America prided itself on its public education. We were first to provide secondary school free for all. With the GI bill, 3 million veterans received tuition-free college or advanced training. For much of the post-war period, great public universities — from City College in New York to the fabled California schools — were free or close to it. Now, as college education becomes ever more necessary, it is becoming ever more unaffordable.
These debts, racked up before beginning one’s work life, are devastating. It means that the young postpone saving. Many more must live at home, burdening parents trying to save for retirement. The young will buy a home later (if ever). They will marry later. They will accumulate far less for their retirements — even as they are expected to save more due to the collapse of pensions.