Over the past several days, I’ve spent a lot of time covering people with money gripes. Last Tuesday, I attended a rally here in New York for people calling for a $15 dollar an hour minimum wage, a virtual doubling of today’s federal minimum wage. And, then on Thursday, I went to Brooklyn, N.Y., to cover a rally for people calling for all student debt to be forgiven and all tuition done away with.
I’m not a fan of bailouts and it seems to me that’s what more and more people are asking for. Freebies. A get out of jail free card. In this column, though, I want to examine the idea of debt forgiveness and what it might mean when it comes to college debt and survey the alternatives.
Current student debt held by forty million Americans is $1.2 trillion dollars. And, the cost to the government of paying tuition each and every year for college students, according to the experts, would be between $70 billion and $80 billion. So, wiping away that debt would cost more than what we pay for Medicare or Medicaid or Social Security in any given year.
Taxing the one percent to pay for education is a non-starter because the richest Americans already pay for much of our government’s needs. Fully 60 percent of households in this country are net recipients of government payments. In other words, they receive more from transfer payments like the Supplemental Nutrition Assistance Program (SNAP) or Social Security than they pay in taxes. Add in the fact that the U.S. faces a national debt of $18.6 trillion, and you have to ask yourself, why add to that burden?
College students have to take it on their own shoulders to reduce their financial burden. Step No. 1 is spending less time in school. That’s right. Only 39 percent of college students graduate in four years. And, that means they are compounding the damage by adding more and more debt. Second, students should attend those schools that are good educators but who also offer affordable tuition. Shopping around isn’t just a strategy for the mall. The range of tuitions is vast. Private school tuition is $31,000 on average this year compared to $9,000 for an in state public school. Only when students say no to these exorbitant tuitions will there be a chance of change in the system.