The high cost of living with student debt.

By Virginia Myers

Tomi Stahlberg just graduated from the University of Helsinki, a prestigious institution in Finland. He has a master’s degree in history, a field he chose because he loves it, not because a career in history would be the moneymaker he’d need to pay off his student loans.

That’s because Stahlberg didn’t need student loans for tuition: For him, and for everyone around him, higher education is free.

For Sam Perry, a college graduate in the United States, the situation is entirely different. His parents covered undergraduate tuition for a history degree at the University of Massachusetts, but he was on his own for law school. He enrolled in a night program so he could work during the day, and saved on rent by living with his mother. Still, he graduated with more than $100,000 in student debt, and took the first job that fit, rather than holding out for the government job he would have preferred; he simply couldn’t delay starting to pay off his loans.

“In Finland you could be absolutely anyone from any kind of social background and study anything you want and be successful within that field,” says Stahlberg, who lived briefly in the United States. “That’s social equality at its best.” By contrast, he says the U.S. system is weighted toward wealthier families and calls it “somewhat unfair.”

Julia Maklin, another Finnish student, is blunter: “I think the American system is unfair and unequal,” she says. “The debt that American students have when they graduate is insane.”

With more than 40 million Americans carrying student debt, it’s easy to forget that it doesn’t have to be this way—and in many countries it is not. But the debt-for-degree paradigm in this country persists. Total student debt has hit $1.3 trillion in this country, its ascent so arresting that an online debt clock records its climb—by thousands of dollars—each minute ( College debt has outpaced every debt but mortgages, including credit cards and auto loans, according to the Federal Reserve.

This may be the moment, however, when it begins to change. From “debt strikes” by students who refuse to pay back their loans because their colleges failed to live up to promises of valid and marketable degrees, to presidential proclamations promoting two years of debt-free education, thousands of people are tuning in to what has become a national crisis. It’s a hopeful beginning, but the climb out of what has become the “new normal” will be steep.

Why we are tackling student debt

There are plenty of extreme cases of student debt, reason enough to change the paradigm. There’s Michael Adorno-Miranda, who is $37,000 in debt and has nothing to show for it but a degree from a college with such a bad reputation its name on his resume actually hindered his ability to find a job in his field. And Latechia Mitchell, a teacher who loves her work with second graders but wonders whether her career was a good choice for someone trying to pay off $60,000 in student loans.

On the website, a 2014 survey of college faculty shows that academics are far from exempt. Of the thousands who responded to the informal survey, most reported they’d taken out loans, many in the six-figure range. “I’ll be paying ’til I die,” noted one. “[Payments] keep me stuck in a job I hate,” wrote another. One Ph.D. grad with $67,000 in debt found that nontenure-track work fell so far short of enabling him to pay off his loans that he left academia altogether, moved in with a family member and got a job at Starbucks. Another wrote that he’d been suicidal over his debt.

But student debt isn’t just a string of unhappy personal anecdotes. It influences everything from enrollment to endowment, shrouding the entire higher education system and affecting what schools students can afford to attend, what fields they choose to study, whether students stay in school, where they live and what jobs they take upon graduation. These factors in turn influence enrollment figures and department funding. They alter campus culture and vibrancy.

Many fear that debt squelches diversity, preventing people who would be the first in their families to attend college from enrolling and persisting through graduation. “As teaching assistants, we see that first-time college students’ acceptance rates are declining, that the number of students of color is declining,” says Eleni Schirmer, a member of the Teaching Assistants’ Association at the University of Wisconsin–Madison, in an article on “It changes the texture of the university.”

Debt affects the economy beyond campus as well: People who have to make student debt payments that can approach $1,000 a month are far less likely to start new businesses, buy new houses, purchase new cars, start families or contribute to the civic lives of their communities. According to Pew Research Center and Rutgers University, 25 to 40 percent of borrowers report postponing purchasing homes and cars. And a Gallup-Purdue University survey of college graduates shows that 26 percent of those who graduated debt-free have started at least one business, compared with just 16 percent of those who graduated with at least $40,000 in debt. 

In 22 states, if you default on your student loans you can be stripped of your professional license, not only barring you from your chosen profession but also, paradoxically, keeping you from making a decent wage—and paying off your loans. If you are still struggling to pay debt when you retire—as an increasing number of people over age 60 are—debt collectors can garnish your Social Security benefits.

And speaking of debt collectors, they are notorious for hounding debtors, even after they’ve already made that final payment. The collectors can make egregious mistakes, jack up interest rates and change monthly payment amounts without notice, so that debtors wind up owing even more in interest—not to mention what it does to a person’s credit report. These mistakes can cost thousands of dollars, and decades of emotional and financial burden.

Hitting home

Faculty and staff are bound to see the impact of student debt in our classrooms and offices—if we haven’t already felt it at home. We advise students struggling to understand financial aid, apply for scholarships and live up to the requirements of whatever grants they’ve been able to snag. When those students experience a time-consuming life event, like a death in the family or an extended illness, we hold their hands as they panic over whether they’ll lose their scholarships or have to extend their time—and expense—before graduation.

Patrick Romain, an academic counselor at the State University of New York at Albany and a member of United University Professions, remembers one student who was homeless and had been diagnosed with lung cancer in his senior year of high school. His mother had died when he was a toddler. “How can a young man like that, really on his own, navigate a system that has become more and more inaccessible to people who really need it?” asks Romain. The question is especially poignant, he says, as a college degree becomes increasingly essential to success, but more and more elusive because of cost. “I see a lot of students who drop out not because they’re not intelligent, not because they’re not smart, not because they can’t handle academic rigor, but because they get a bill and they cannot afford to pay it.”

In the classroom, we watch as students make decisions based on finances rather than heart. A young woman with a passion for chemistry sees that the job market is limited, especially for women, so she converts her business minor into a major. A young man who discovers his talent for law three years into a biology major, sticks with biology because the extra time a pre-law degree requires could set him back a semester. Plus, there would be more loans for law school.

Again, we can draw a comparison with Finland, though it’s certainly not the only place with more reasonable college costs. Finnish student Helleke Heikkinen changed her major from sociology to supply chain management and transferred to a different school as well. The freedom from financial burden “allows students to take their time to figure out what they want to do,” she says. “They can choose whatever they want to study, not thinking about costs.”

Imagine that.

Back in the American college classroom, instead of watching a student transfer to another major, faculty might discover they are missing from campus altogether, dropped out because the cost of debt has made higher education impossible to continue. This has implications not only for the individual student but for equity in higher education. The public policy organization Demos calls it the “debt divide,” and it is deepening the gap between the haves and the have-nots.

The short story is this: Student debt hits low-income families much harder, because they have to borrow so much more to even get in the door. It is cumulative and generational. A first generation student still paying off her own college debt is less able to take out more debt for her college-age daughter. And once either graduates—if that happens—that debt is likely to keep them from thriving. Meanwhile, those who graduate debt-free—whose families paid their tuition, who came into an inheritance, whose parents took out loans for them—are more immediately ready to enter the economy, start businesses, take inspiring jobs, travel, and purchase cars and homes. 

How did we get here?

Much has been said about colleges that “need” higher tuition from students to cover the costs of expensive athletic programs, luxury residence halls and attractive perks like lazy river swimming pools. These are satisfyingly over-the-top targets for righteous indignation over indulgent spending, but the bigger culprit really is the dry and plodding state budget. Student debt is a direct result of the rising cost of higher education. And that cost can be laid largely at the feet of our state budgets and the elected officials who draft them.

States have gouged their investment in public education so thoroughly that the balance between how much tuition the state pays and how much the individual pays has been reversed. State spending per college student has plummeted by 28 percent since 2008 according to the Center on Budget and Policy Priorities. And because those funds have diminished so dramatically, tuition has soared. Over the last 10 years, the cost of attending a four-year state college or university—tuition, fees, room and board—has increased by 45 percent.

One of the most egregious examples is in Wisconsin. Gov. Scott Walker slashed the higher education budget by $250 million, a staggering sum that represents the biggest cut in the state’s history and one of the largest in the nation. Colleges are anticipating faculty and staff layoffs, and offering less aid to needy students, according to at least one firsthand account. At the same time, Walker has weakened tenure and abolished shared governance, so that administrators will have a freer hand in budgetary matters. Faculty concerned with losing their academic freedom are being poached by other universities that may be offering higher salaries; the loss of top faculty could threaten the reputation of a university system that has been a leader in the nation. To add insult to injury, Walker suggested that his higher ed cuts be made up by correcting “inefficiencies”: “Maybe it’s time for faculty and staff to start thinking about teaching more classes and doing more work,” he said.

Or maybe Walker and others could look to those luxury items—the pools, the perks—that may not top state cuts in affecting the bottom line but are certainly a significant factor, along with exorbitant salaries for top-heavy administrative offices. Each year the Chronicle of Higher Education’s report on executive salaries sends shock waves through a new generation of students and the parents who support them. Last year it found two presidents from public universities and 36 from privates who earned salaries that topped $1 million.

The Rutgers Council of AAUP (American Association of University Professors) Chapters/AFT has mounted a campaign, “Reclaim Rutgers,” to target the disparity in spending on their campuses. If money were directed away from expensive administrators, coaches and football programs, academic programs could afford to pay full-time, tenure-track faculty, or at least take better care of their adjuncts. But a recent master plan revealed a university wish list including a rooftop athletic field, new residence halls, renovated buildings and a boardwalk along the Raritan River campus.

“The expanding ranks of highly paid managers and the bottomless pit of athletics spending seem far greater cost drivers at Rutgers than faculty and staff who experienced years of wage freezes while tuition continued to rise,” Deepa Kumar told a reporter in July, when university administrators pointed to a 2 percent salary increase for faculty as one reason tuition will rise this year. Kumar is a professor of journalism and media studies and co-chair of the contract action team for Rutgers AAUP-AFT. The union has noted that 79 top administrators are paid at least $250,000 a year, according to a 2014 audit. It also notes that the $75 million athletic program was not self-supported in 2013, taking 44 percent of its funding from student fees and core academic funds.

At Rutgers and across the country, it all adds up to the student debt debacle: High costs equal high tuition, which equals high rates of borrowing.

Let’s fix this

More and more people—including influential policymakers and elected officials—are turning to student debt as a problem we can solve. There are several pieces of federal legislation under consideration, and countless state bills proposed to either relieve student debt or decrease the cost of higher education directly.

President Obama’s America’s College Promise would provide two years of free community college education to every qualified student. The federal government would cover 75 percent of the cost, and states would pick up the remaining 25 percent. If all states participate, as many as 9 million students could benefit.

Presidential candidate Hillary Clinton has made student debt a central pillar of her campaign with her New College Compact (see page 15). “Too many young people are struggling under the burden of student debt, and too many families are struggling to pay the rising cost of college,” she told the AFT’s executive board during the candidate interviews that preceded the AFT’s Clinton endorsement. “Too many students are starting but never completing college, which means they leave with debt but no degree.” Clinton has pledged to find ways to “make college more affordable, … make sure no one graduates with crushing debt, and … hold colleges accountable to help more students graduate.” She has also suggested doing more to link student loan repayments to income and help people refinance their loans.

Other Democratic candidates are also tuning in: Bernie Sanders wants to offer free tuition across the board; Martin O’Malley proposed debt-free college through various tuition limitations and federal grants.

Meanwhile, Congress has more than 70 co-sponsors and 400,000 supporting petition signatures on the Schatz-Schumer-Warren debt-free resolution in the Senate and the Grijalva-Ellison-Clark resolution in the House; the measures would increase financial aid, lower tuition and accelerate academic progress to help students avoid debt. 

Sen. Elizabeth Warren (D-Mass.) announced a plan this June that includes specific steps for colleges, states and the federal government to change the student debt paradigm. Among her mandates: hold colleges responsible for keeping costs down; prevent states from disinvesting in public education; and fix the federal programs, such as Pell Grants and complicated financial aid applications, that should be supporting low-income students who want to get a college degree.

The Protections and Regulations for Our Students (PRO Students) Act would prevent the exploitation of students by some predatory, deceptive and fraudulent for-profit colleges, which lure sometimes ill-prepared students into their programs, take their federal financial aid awards, then fail to give them the education they promised. The result? Students with useless degrees—or no degrees at all—and mountains of debt. Activism around for-profit abuse helped close Corinthian Colleges, one of the worst culprits, and convince the Department of Education to forgive the debt of many Corinthian students who were swindled into an “education” that failed them.

Both the U.S. House of Representatives and the Senate are chattering about taking up the Higher Education Act for reauthorization this fall, and many see that as the best vehicle to comprehensively address student debt. Since it is on the minds of so many, and it’s an election year, it is reasonable to expect some progress.

Meanwhile, organizations like Jobs with Justice have mounted informational campaigns to ensure students know about student debt forgiveness and other management tools, like The website outlines the public service debt forgiveness program, for one: The program forgives all student debt for graduates who make on-time payments for 10 years and work full-time in public service jobs. Other debt management tools include income-based repayment, which limits monthly payments to an amount students can afford based on what kind of money they are making. Some AFT locals are reaching out to their members, publicizing these debt relief strategies with workshops and informational campaigns, and urging their institutions to do the same for students. AFT-Washington is among them. “Student debt on top of stagnant salaries for community and technical college faculty has been especially problematic,” says AFT-Washington President Karen Strickland. “Add to that the high numbers of adjunct faculty who make 50 to 70 percent of what full-time faculty make, and you end up with faculty who are working hard and barely getting by.”

The student debt problem is big enough that many solutions must be put into play at once. One is the Debt-Free Checklist, a tool designed to keep any debt-free college plans focused on the most important elements of debt relief. Any debt-free plan should be available at any college, to any student, and should cover not just tuition but also fees, textbooks and other costs, it states. “We have to mitigate the debt that’s already due,” said AFT President Randi Weingarten during the Checklist launch with the Progressive Change Committee and Demos. “Why would we incur additional debt? It is paradoxical, and I would argue hypocritical, to say that college is so important but make it increasingly out of reach for all but those who are the most wealthy.”

She emphasizes the importance of halting disinvestment in public higher education, and draws a bright line from disinvestment to student debt, but also to the soaring use of adjunct faculty. While many students are being prevented from attending college, the college experience of those who do attend has been diminished by an increased reliance on underpaid, overworked adjuncts who are not given the resources they need to provide a high-quality education. And, incidentally, many of them are still working to pay off their own student loans.

It’s a vicious circle that begins and ends with student debt. Wiping it out—or at least diminishing its role in shaping higher education in this country—will put us one step closer to reclaiming the promise of equity and high quality for faculty, staff and students in our colleges and universities.


AFT On Campus, Fall 2015 Download PDF (2.24 MB)
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