With the domestic student loan debt reaching over $1 trillion last month, student loans are already threatening the return of the housing market and retirement savings. Forty-seven percent of Millennials even say student loans have delayed them from buying even a car.
Horror stories of unemployed graduates – and financially-strapped parents – with hundreds of thousands in loans are all too common.
On Wednesday in The Detroit Times, General President Jim Hoffa wrote:
Higher education has long been the stepping stone to a better life. But that stone is being swept away by a tide of student debt.
The numbers tell a frightening story: As many as 30 percent of borrowers may be delinquent on their student loan debt. More students are borrowing than ever before, and they’re borrowing more — the average loan has increased by 49 percent, to $24,803, since 2005. Today, the average student in this country graduates with $26,600 in loan debt.Higher education is essential, not just for our children but for our members. More union members than ever are college educated, with the percentage of college-educated union workers doubling since 1983. Scholarships like the James R. Hoffa Memorial Scholarship Fund cannot always fill the gap between family finances and the rapidly increasing cost of education. Financially vulnerable students have no choice but to borrow.
And it doesn't just affect the debt-ridden; lower-income students who manage to graduate are often forced to follow their wallets over their dreams because of high loan payments and low employment prospects. Howard Dean’s Roll Call op-ed on Wednesday notes:
Doctoring isn’t the only field losing out on talented young first globals, thanks to the long-term costs of crushing student debt. Recently, the Consumer Financial Protection Bureau found that the low salary and high debt load are increasingly turning teaching into an impractical career, despite how important education is to improving the nation’s long-term economic prospects....
Our hospitals, government, nonprofits, and classrooms are losing out on a generation of talent, because new workers who come from middle-class and low-income families – the people who have the most experience with social problems – can’t afford to work for the public interest. Without intervention, this trend is only going to continue.With the tripling of educational debt since 2004, the lower loan rates are the only short-term solution available for younger generations.
Unfortunately, future and current college students have no guarantee that even current interest rates will remain constant – unsubsidized Stafford loan rates, held by middle-class and low-income students, are set to double on July 1, adding over $7,000 to the repayment of the average loan if Congress fails to intervene.
Without a plan for educational affordability, Congress is jeopardizing the social well-being of our workers and our nation. We need a higher education infrastructure that actively works to provide access for all Americans – not just the wealthy.