by The quintessential “American Dream” is one of the most pervasive and iconic themes of the twentieth and twenty-first centuries — our mentors push us toward it; the media glamorizes it; poor Jay Gatsby died trying to achieve it. However, as young graduates across the nation return to their parents’ homes with diplomas in one hopeful hand, the goal of proud, self-governed homeownership seems to slip further and further away.
The dream of basking in self-sufficiency behind a white picket fence has been stifled for many young people currently facing looming responsibilities of adulthood. Times have drastically changed since F. Scott Fitzgerald penned his greatest novel, and buying a house (or even renting an apartment) seems impractical for many fresh-faced alumnae determinedly attending their entry-level jobs.
For many employers, a bachelor’s degree has replaced a high school diploma as the bare minimum. Competitive internships and fellowships are fought over by eager young students. The career seekers’ complaint heard ’round the country is “I need experience to get experience!” All of these have helped to produce a generation with high expectations, but stunted independence.
In a high-pressure world of networking and ladder-climbing, it would seem only natural that there should be one area to alleviate stress: affordability of college and universities. This is where America is the exception, and not in a good way. I couldn’t help the bitter laugh that escaped me last winter as I read about Canadian students protesting tuition hikes that STILL left them thousands of dollars better off than the average American college kid.
In addition to that, many European and Scandinavian countries offer comparatively cheap or even free-tuition colleges, a phenomenon that seems unbelievable to us. On the other hand, before we see these places as golden oases of learning, we have to keep in mind that these educations are also coupled with high taxes and living expenses that might make an American recoil. In this way, it’s hard to imagine simply “fixing” our college prices without reworking our entire economic system.
I understand that there are some current ways to combat this issue: attending community colleges, work-study, and up until recently, military enlistment. The issue is that we shouldn’t have to combat such major prices in the first place. We shouldn’t have to worry about entering the workforce already saddled with thousands of dollars of debt on our backs.
This is a country which happily encourages achievement of “picket fence” independence through social mobility. Affordable education is a vital step in this mobility. As tuition continues to rise and federal Pell grants stagnate, it is worrisome (to say the least) to learn of sequestration on financial loans and uncertainty in job prospects. The American Dream is far from dead, but its attainability needs to be revived.
Thanks for this reflexive article, Emily! What is the answer to this problem? More affordable home loans? A different way of getting students through college without going into deep debt?
How to we save those who are already in the depths?
As Gordon mentioned below me, I think we generally need a higher understanding of 529 plans, student loans, parent PLUS loans, and so on. Neither of my parents went to college, so they had a bit of a disconnect from these things, and unfortunately I probably did too. Perhaps a specialized course on finances for high schoolers would help. My economics class I took in high school really only taught me some vague terms with no real-life application.
But hey, now I’m bashing the wrong kind of school! Back to colleges: for those already in deep, I think it would be extremely helpful to put a freeze on loan interest. I just got an email the other day (which inspired me to write this) informing me of probable sequestration on federal aid. This would significantly increase the origination fees on both student and parent loans, which is disheartening when I feel like debt is already piling up. The interests on these loans should at the very least have a rate ceiling, if not get reduced for students.
In addition to this, it might help to make loan forgiveness more widespread after a certain amount of time. Right now it is mainly based on a person’s long-term service in volunteer, military, or public work. I think it could help if a person was “forgiven” of any remainder of their debt if they had been paying it off faithfully for a certain amount of years.
Emily —
What you say is right — but does it work in practice? If you get into a prestigious school and have no parental support and you have to take out tons of student loans just to pay the tuition — are you being stupid or taking an opportunity you hope you can make something of in the future? The bet is on oneself and when you are young and idealistic, you’ll sign anything due and owing after graduation because you’re desperate for the loan money to get that diploma.
I don’t think the sequestration rate will be too much, Emily. The sequestration Fed rates will rise only 0.42% for a total of 4.42%, so on a $5,000 loan, that’s only an increase of $20 in origination fees.
There is federal loan forgiveness after 20 years — but only if you’ve been paying on that loan for 20 years without being on any sort of special repayment program. Sounds good in theory, but in reality, it is absolutely un-doable for almost everyone. To get on a teaching forgiveness plan, you have to go on a full repayment plan for at least 18 months to qualify — that too, is unreasonable, because many borrowers have some sort of deferment or forbearance in the mix that muddles the repayment history.
There’s over $1 trillion of outstanding Federal student loan debt — and when the day comes that it is all due and owing — there’s going to be a borrower revolution of such magnitude and fury that will never be forgotten or forgiven.
Good points and thanks for any clarifications. (I mean, $20 more is still the last thing I need, but that’s just the cheapskate in me talking!) It’s hard to say anything with certainty until it’s put into practice– just like the kid who tries for the prestigious school– and by the time you see results, it might be too late to back out!
You also brought up one of my biggest problems with the forgiveness policies too- it seems like a beacon of hope, but past certain requirements, career paths, and picture-perfect credit history, it turns out “un-doable” for most!
I wonder when the ‘revolution’ will be. I can’t help but hope I’m around to see it!
The Revolution will happen with a Republican President and a majority Republican Congress and Republican Senate — as they set about to “pay back” all those highly educated, Liberalist, Nincompoops they despise by demanding all overdue Federal student loans are immediately due and owing and paid-in-full!
There will be zero risk to their own constituency in doing that and they will thrill in their revenge against the “intellectuals.”
They will gravely underestimate the blowback and repercussions.
P.S. —
There’s another angle on the “loan forgiveness” that really isn’t after 20 years. The amount you do not pay off — the “forgiven” amount — gets turned around on you and reported to the IRS as income.
So, the loan you could not repay, suddenly becomes a 30% tax bill you cannot pay, either — but instead of dealing with the Department of Education — you’re now subservient to the IRS… due and owing!
I feel their pain – well my daughter does – she has 20 thousand UK pounds of “student” debt around her neck after her Bathelors degree – thank goodness her PhD was research based and she was paid as well as having her tuition fees sponsored.
She then had over a year before she could even get a temporary job – luckily when she got that she was taken on permanently.
Good for your daughter for managing it! I know a few colleagues who want to get paid for graduate research as well. If you don’t mind me asking, what was her field of study?
She is a Biochemist. He area of research was the use of silver compounds in specific healing processes. Her main project was the development of a silver compound that could be used in nappy liners to prevent and treat Nappy/Diaper rash in babies.
THIS is exactly why I am putting aside money every month into a 529 plan and, when people ask what to give for his birthday and holidays, I suggest that they give to the plan instead! 🙂
That is a great idea and I’m sure he will appreciate it so much when he is older. I don’t blame my parents at all for not doing that for me (they have still helped me immensely with college costs!), but if I ever have kids I definitely want to take the same route.
I owe way to much because of college.
Tell me about it! The thought of paying it back without winning the lottery first makes me cringe.
I’m banking on finding a rich wife. :p
Very nice article Emily. I like your comment about people saying they need experience to get the career they need and I have noticed that many think that going to school/college will get them experience the experience they need, but it doesn’t always work out that way.
So true! Higher education seems like the minimum now!