During COVID-19 pandemic, student debt should be canceled
- A decent college education shouldn’t leave students with thousands and thousands of dollars in debt.
- During the pandemic, millions of people experience financial uncertainty.
- Now is the time to tackle the underlying issues that lead to massive student debt.
- JH Deakins is a writer from Los Angeles.
- This is an opinion column. The thoughts expressed are those of the author.
- Visit the Business Insider homepage for more stories.
Thanks to a simple white envelope, with my name and address printed on the side, sent by my alma mater – instead of having it on stage at graduation – I received my diploma through my mailbox.
As a country, we have been ravaged by the coronavirus pandemic. No one is immune to the universal effects of what is now to be called “the new normal”. The economy is slipping precipitously into a Deeper abyss. Public institutions, like the one I just came out of, are facing an existential crisis. I have chosen a hell of a time to become a writer.
About four million students have disembarked from the familiarity of the school this year. Over the past month and a half, graduates of the Class of 2020 have entered their professional lives into an era of unprecedented uncertainty. Without the beginnings, the addresses of look-what-I-accomplished alumni, or rigid fabric caps and dresses, it’s hard not to feel cheated.
I don’t want encouragement. I don’t want the niceties of offline celebrities who could pay my debt a hundred times over. What I want – with at least 1.2 million of My Cohorts – is a long and serious review of student debt reduction. All $ 1.6 trillion of it. The cancellation of student loans has been at the forefront of Democratic debates and has been a major selling point for several of the key candidates (the future candidate, Joe Biden, was unfortunately not one of them).
But in the face of the uncertainty of the economic collapse, it’s time for Biden, Congress, and our outgoing president to take a serious look.
Plans that fail
As it stands, both presidential candidates have woefully inadequate plans for dealing with the scale of the student debt crisis. To finish, a bipartisan issue on which the two parties do not hesitate to agree.
by Biden plan makes people with incomes less than $ 25,000 per year exempt from student loan payments. Unfortunately, according to the latest data from the Bureau of Labor and Statistics, the average annual income for Americans aged 20 to 24 (college age or immediately after graduation) is about $ 30,000 – this average only increases with age.
For those over the $ 25,000 threshold, Biden guarantees that only 5% of your discretionary income (income minus taxes, housing, food, other essentials) will necessarily go towards your loans. Keep it up and, Biden promises, after twenty years of constant payment, the rest will be forgiven.
Let’s do some quick math and find out what that monthly bill will look like. Let’s say you earn $ 30,000 a year and you live in Cleveland. In Ohio, your average tax rate is around 15.5%. Median Monthly Rent in Cleveland was on $ 700 and other essentials add $ 200 per month to that. After taxes, housing, and other essentials, you would have $ 14,550 in annual discretionary income or $ 1,212.50 per month – take five percent of that and you have the lucky number.
The average graduate left college with $ 37,000 in debt in 2017. With Biden’s proposal, Jane Doe, our Ohio woman will pay around $ 60 a month for twenty years – nearly fifteen thousand dollars.
In contrast, Mr. Trump’s proposal in his Budget 2021 increases the monthly rate to 12.5% of discretionary income and creates a fifteen year window of forgiveness. Jane Doe pays $ 151 per month for fifteen years: $ 27,281.
This money comes from the same pot you use to buy a house, rent a car, or pay an unexpected hospital bill. The American mantra of save and accumulate does not float.
I choose my words carefully and say a “long serious look” to be realistic, to understand that a Sandersesque cancellation of all debts is not yet in the cards. But also underline the seriousness of the weight of this burden on the 45 million borrowers who share it. With continued inaction, we are consciously crippling the financial stability of millions of Americans and leaving them economically precarious.
Resolve the underlying problem
There is no panacea for $ 1.6 trillion in student debt. Neither two politicians will agree, nor two economists, nor two university graduates. I analyzed Biden and Trump’s plans to show where each party leader’s current and realistic mid-road policy lies – without any endorsement either.
But with Biden’s more generous proposal or the idea of cutting current outstanding debt, there’s another problem. A decent college education still shouldn’t leave Americans with tens of thousands of dollars in debt.
Currently the most expensive tuition fees for public universities can climb that high $ 90,000 for four years. This is the cost of tuition fees for taxpaying residents who wish to attend their own public school. Make it an Ivy League and it’ll cost you two or three times as much (maybe more depending on how much you want to win).
The skyrocketing cost of what is becoming a necessary part of education must be part of any student debt relief plan.
The change made to this system requires understanding the policies that our representatives advocate and recognizing the measures necessary to reduce the cost of college studies. Every recent graduate and future graduate should remember that there is still a long way to go when it comes to the cost of a college education. Arm yourself with data and vote accordingly.
The class of 2020 could represent, not only recovery of a devastated country, but the renewed urgency to face existential threats such as the global pandemic, student debt or climate change and to fight them in a preventive, collective way. We are the future of humanity and the guarantors that those who come after us will be cared for.
We are heading at full sail in a storm of political, economic and social upheaval, we don’t need your sympathy or your pity – we need policies to solve the problems in our society. If anything positive comes from a year like 2020, it will be that the next generation of doctors, lawyers, journalists, etc., will be hardened in their resolve to stand up for these policies and face systemic issues head-on. .
I couldn’t live the vision I had of my degree. I couldn’t walk on a stage, for family and friends, diploma in hand, greet the teachers, make a sarcastic comment to my dad as we pose for a photo, etc. Instead, I listened to Oprah tell me everything is going to be OK, I have a pat on the back from Walgreens, and even watched some musical performances.
For now, forget about e-ceremonies and televised congratulations. May the class of 2020 feel cheated. My diploma came with a coupon book and a credit card statement. Remember when November arrives, vote accordingly.
JH Deakins is a freelance journalist and screenwriter from Los Angeles.