Congresswoman Debbie Dingell came to the University of Michigan yesterday to host an hour-long roundtable discussion on student loan debt.
She began by saying,
“I think we’re all concerned about the staggering amount of student debt we now see in this country.”
We should be a lot more concerned than we are. The nation’s total student loan debt amounts to $1.2 trillion dollars, a figure that’s increasing exponentially. There’s no big mystery why, either. The cost of getting a college degree has risen more than one thousand percent over the past thirty years.
The cost of housing, meanwhile, has only risen by 175 percent. Go a little further back, and the comparison is even more staggering. When I was a freshman at Michigan State in 1969, tuition was fifteen dollars a credit hour.
Adjusted for inflation, that’s about $95 dollars today.
Know what tuition is now? If you enrolled for fifteen credits at MSU last fall, you could expect a bill for $13,246 dollars for tuition and fees alone -- and that’s before living expenses.
The average cost of a four year degree from either MSU or the U of M is well over a hundred thousand dollars. Very few parents not named Bill Gates can afford that, and so students borrow.
According to Dingell, the average student emerges from college with a student loan debt of $30,000. Some owe much more. Most liberal arts graduates are lucky to make that much a year in their first job. How can they pay this money back in a timely fashion?
They can’t. And they can’t even renegotiate it. As Dingell told the students, “You can refinance your home loan, you can refinance your auto loan, but you can’t refinance a student loan.”
This is not only unfair, it is profoundly stupid. Michigan and America’s economic future depend on a better educated workforce than we now have. But we make it harder than almost any other developed nation to get an education, and we are punishing them for having borrowed money to do so.
Dingell is cosponsoring a sensible bill called the Bank on Students Emergency Refinancing Loan Act. It would allow students who have borrowed money either from the federal government or the private sector to refinance their loans.
She estimates this would save people more than $50 billion nationwide. This is a cause that should have bipartisan support, but I wouldn’t get my hopes up. Elizabeth Warren introduced a similar bill in the Senate last year, but it didn’t go anywhere.
And that was when Democrats still controlled the Senate. Republicans hold both houses of Congress now, and I’d guess they won’t have any desire to make a freshman Democrat with a famous name look good. What both parties should be thinking about is saving the American economy from a looming crisis.
Some statistics show that a third of federal student loan debt is in default or close to it, with more and more former students being unable to pay.
As the congresswoman herself noted, her bill is by no means a complete solution to the college affordability problem, but it would provide desperately needed relief.
Anybody who is potentially affected should lobby their members of Congress, now.
Jack Lessenberry is Michigan Radio's political analyst. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.