Student debt burdens leave Americans helpless

As the March 1 deadline for the Free Application for Federal Student Aid whizzes by, it is worthwhile to examine the onerous burdens involved in getting a college-level education. After all, the student loan racket is a multi-billion dollar industry, with the federal government raking in $41.3 billion in profits in 2013. According to the Congressional Budget Office, the federal government will continue to profit off our loans until at least 2024.

Meanwhile, students are often unable to pay off these loans and frequently move back in with their parents – all to pay for education, which should be free in the first place.

The costs for students are immense. According to the Detroit Free Press, the national average debt for a 2012 graduate is a whopping $29,400.

Geneseo is a public college, so one would think that graduates would have much less debt, perhaps under $10,000. Instead, the average Geneseo student will graduate with $21,000 in student loans, according to Kiplinger – a mere $8,400 less than the national average.

As Geneseo is a State University of New York college, state funds do indeed help mitigate the cost to students, but calling Geneseo a “public” college is too charitable.

In a previous editorial for The Lamron, I wrote, “For the 2012-2013 budget, a mere 28 percent of the college’s funding came from the state. Close to 70 percent came from tuition – in other words, extracted from the student body.”

Students – both at Geneseo and across the United States – use loans to supplement what they and their parents are able to pay out of pocket. These tens of thousands of dollars in debt impede students’ ability to get their lives going after graduation.

For example, a Department of Education study found that 23 percent of 26 or 27-year olds are living with their parents – much more than the 10 percent living with roommates. Additionally, having massive debt prompts graduates to accept steady but low-paying jobs rather than working on a more risky venture like starting a business or working creatively.

Any efforts to curb this are meager at best. Congress let lower interest rates for federally subsidized Stafford loans expire in the summer of 2013, doubling the rate to 6.8 percent. The bipartisan scheme to “fix” this, the Bipartisan Student Loan Certainty Act, passed quickly before the congressional summer recess and temporarily pushed rates back down to 3.9 percent.

This rate, still higher than the previous 3.4 percent, is now tied to the market. Once the government begins increasing interest rates again, the student loan rate will increase correspondingly.

Therefore, in a “healthy” economy – which still leaves millions unemployed – the rates will increase to up to 8.25 percent for undergraduates. Graduate students and parents face up to 9.5 and 10.5 percent, respectively.

The knowledge that they are likely to leave school with tens of thousands of dollars in debt undoubtedly deters working-class youth from pursuing college. Instead, they are often thrown into the poverty-wage service industry or just go unemployed.

Instead of profiting from student loans, the government should make education in every public college free. The money to run high-quality colleges can come from the bloated military, financial bailouts and corporate subsidies. Only then can the human right to an education be secured.