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Why Are We Still Paying These D*mn Student Loans

It’s Like, Really Bad

The second most crippling financial burden of the Millennial generation (and Generation X and Generation Z…) is student debt. Second only to mortgage debt, it’s higher than both credit card debt and auto loans.

In 2010, student debt hovered at around $830 billion, but as of May 2022, the country stands at a whopping $1.7 trillion in debt.

According to original reports by the Education Data Initiative, the average public university student borrows $30,030 to obtain a bachelor’s degree, private, non-profit university attendees borrow $33,900 and private, for-profit students borrow $43,900.

In the media’s reporting on student loans, there is one statistic that often gets left out; the interest rate. In June 2022, the interest rate for a 30-year fixed mortgage, the most popular type of loan was 5.72%, a record high since 2009.

The average rate on federal fixed-rate student loans in May of 2022 was 6.42%; not a record high. (Note: This author is a college graduate from the class of 2014 with federal student loans given at a fixed-interest rate of nearly 9%; anecdotally, the highest I’ve heard is 12%, but feel free to add your numbers to the comments.)

Users on social media are sharing their stories, urging students not to make the same mistakes. @baddie.brad voices a common frustration about the insanity of the interest amounts.

A mortgage provides shelter, plus the act of buying property is generally considered a solid investment (save for a few significant periods in economic history). But now that bachelor’s degrees don’t guarantee high-paying jobs, higher education in America is no longer a solid investment.

The Cry To Cancel It All

The idea to scrap it all originated with online support by Robert Applebaum, a lawyer who graduated from Fordham Law School in 1998 with about $65,000 in debt, and his 2009 petition.

In Facebook’s heyday, Applebaum posted a proposal for debt forgiveness on his account, citing how its impact would significantly benefit the economy if former students had several hundred more dollars a month to spend. The post gained over 300,000 likes on Facebook, and it spurred him to create ForgiveStudentLoanDebt.com.

“Your student loans are with you for life — both federal and private loans,” he said. “There is no recourse for student loan borrowers if they run into trouble. The only recourse they have is to put the loans into forbearance, like I had to do, or economic deferment.”

The idea snowballed into one of the official goals of the Fall 2011 Occupy Wall Street movement. Protestors occupied Zuccotti Park, located in Manhattan’s financial district, to challenge the economic inequality of the Great Recession, corporate influence in politics, and the government financial bailouts. The slogan, “We are the 99%,” calling out how 1% of the country owns most of the wealth, exemplified two out of three Americans’ discontent with the income gap.

Progressive Senator Bernie Sanders adopted the slogan into his campaign for President, along with a strong push for debt cancellation.

As of 2020, “at least one in four student loan borrowers are delinquent, in default, or otherwise unable to pay their loans due to low income or economic hardship.”

In 2020, the push for cancellation began to reach Democratic moderates, with Senate Minority Leader Chuck Schumer (D-NY) sending out the Tweet: #CancelStudentDebt.

Today, some form of canceling student debt is supported by 59% of senators, including 53% of Republicans, making the move a rare example of bipartisan support.

President Biden’s Promise To Cancel Student Debt

One of the most politically progressive elements of President Biden’s election campaign was the promise to cancel student debt…but did he really promise it?

Pitted against more progressive Democratic incumbents Sanders and Senator Elizabeth Warren, Joe Biden adopted some cancellation of debt, but never explicitly promised to cancel it all.

On November 16, 2020 Biden said in a speech that forgiving $10,000 in student debt "should be done immediately."

But as for who will be doing the canceling and who will actually be forgiven, he has gone on record saying that he is open to canceling $10,000 per person making under $150,000 per year. Sure, any cancellation would be nice, but 45 million people have student loans; assuming they all make under $150k — which they don’t — that would be a cancellation of $450 billion, bringing the national student debt down to a still-whopping 1.25 trillion.

Although more than half of those 45 million people have more than $20,000 in student loans, they are often the least likely to be making consistent payments; 40% of student loan borrowers did not finish their degree.

Those with the highest loan payments often carry higher education loads, like medical school, and are thought to have an easier time paying back loans, thanks to generally higher income. However, that’s not always the case. Rep. Alexandria Ocasio-Cortez points out that it’s particularly cruel that the $150k income cap would exclude so many of the pandemic’s front-line healthcare workers.

So how close are we to getting a crumb of debt cancellation?

As of today, the Biden-Harris administration lists 7 top priorities: Covid-19, Climate, Racial Equity, Economy, Healthcare, Immigration, and Restoring America’s Global Standing. Although forgiving student loan debt would impact many of these matters, the issue is notably absent from this list, despite its enthusiasm on the campaign trail.

In mid-May, Sen. Elizabeth Warren, Chuck Schumer, and Raphael Warnock met with President Biden to push for $50,000 in relief per borrower - that would wipe the debt of 72% of borrowers, as opposed to the $10k plan’s total erasure for about 33% of borrowers.

Senator Elizabeth Warren has been a consistent supporter of debt forgiveness and has claimed President Biden could do it as early as tomorrow. Getting Congressional approval is not necessary; he could sign it away in an executive action if he so chose.

Federal Student Aid Chief Operating Officer Richard Cordray more recently announced concrete plans to revamp student-loan servicing in the coming year.

Regarding the six different student-loan companies handling federal loans, he said the "disjointed servicing system is often confusing for borrowers and, frankly, the quality of work has not always met our standards." Current loan servicing contracts are set to expire in December 2023, but students with loans are not interested in more convenient options for repayment; they don’t want to repay it at all.

The Pandemic Pause

Beginning on the unofficial ‘day the world shut down,’ March 13, 2020, the U.S. Department of Education enacted a moratorium on student loans. Loan payments were suspended, the interest rate dropped to 0%, and there were no collections on defaulted loans.

That hold has now been extended 7 different times. The most recent freeze is currently in effect until August 31, 2022, just two months before midterm elections.

The two-year pause is arguably the best case for debt forgiveness, especially as the U.S. is likely heading into a recession. To restart student loan payments in a time of layoffs would be particularly vicious for 45 million Americans.

Is A College Education Even Worth It?

Women make up about 60% of the university population and The American Association of University Women reports that women hold nearly two-thirds of all student loan debt; Black women hold a disproportionately large amount of that debt. Between the gender pay gap and the racial pay gap, it can be particularly challenging to repay those loans.

Historically, when an occupation becomes female-dominated, pay decreases. So now that the college-educated class is predominantly women, what does that say about the perceived value of an education?

I graduated high school in 2010 with mostly A’s; I was not presented any options besides a 4-year college education. Community college was stigmatized by the media, my parents, and their peers, and trade schools were never mentioned because of my high grades.

It’s been common knowledge for many years that a bachelor’s degree guarantees a “good” job; my first job out of college was bartending. So was my second.

Having a bachelor’s degree did eventually open doors for me, but how many open jobs currently hiring on Indeed require a bachelor’s degree when an onboarding process could teach a new employee everything they need to know to perform their job?

College brochures with sprawling campuses illuminated by fall leaves promise friendship, academic rigor, exciting activities, and high quality of life. They may hold up famous alumni as beacons or boast statistics about job placements, but the old adage ‘it’s who you know’ is still king.

At least 70% of students graduate with debt. As debt rises, that return on investment becomes lower and lower. To escape the madness, a 2019 survey concluded that 86% of young Americans wanted to become an influencer.

Even rockstars sometimes go to music school; it’s no surprise that the influencer life — building a likable personality and recommending products — is one that requires no education; no threat of debt hanging overhead in their prime years for buying property and growing families, or even for the rest of their lives.

The Warren-Sanders Feud Is a Threat to the Future of America, and the World

They need to put their differences aside if either of them hopes to win

In a recent interview with New York Magazine Alexandria Ocasio-Cortez commented that "in any other country, Joe Biden and I would not be in the same party, but in America we are."

With consistent cries for party unity since before presidential candidates even began announcing their campaigns, it would be tempting to attack Ocasio-Cortez as splitting the party, but she is absolutely right. There is only a unified party to split on paper. America's winner-take-all style of voting forces disparate political interests to share a title and to pool donors—unless they have the ability, like AOC, to source their own funding.

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The GOP has used this to their advantage, emphasizing social wedge issues like abortion and immigration to pull working-class white voters away from their economic interests on the left—convincing them to cheer on tax cuts for the ultra-wealthy. For the Democrats, however, the powerful faction of the party that represents professional-class interests—the private-public partnership, means-testing, social-program-cutting wing—has represented a barrier to participation for truly progressive candidates and voters.

That's why it has been heartening, prior to this week, to see Bernie Sanders and Elizabeth Warren avoiding the temptation to attack one another. While many of Bernie's supporters online have adopted toxic attitudes toward anyone other than their preferred candidate, and many Warren supporters have questioned Bernie's feminist bona fides (particularly in light of that toxicity from many "Bernie Bros"), the candidates and their campaigns seemed largely cordial and supportive of one another. It's important, as the marginalized left-wing of the party, to focus on commonalities and mutual aid if there is going to be any hope of overcoming the powerful centrist forces that have ruled the party and served moneyed interests with only moderately less zeal than the Republican party.

Sanders Warren TruceJustin Sullivan/Getty Images

That shared effort began to fall apart on Saturday night when Politico ran a story under the headline "Bernie Campaign Slams Warren as Candidate of the Elite." The story included excerpts from a document purported to be circulated within the Sanders campaign, with scripts instructing volunteers how to attack rivals in the Democratic primaries. While criticisms of Joe Biden and Pete Buttigieg are hardly surprising, the attacks on Warren—noting that her supporters are predominantly educated, affluent voters who "who are going to show up and vote Democratic no matter what"—came as a surprise in the context of the candidates' established alliance.

Skepticism in these cases is usually warranted, but the article contained little to suggest that the content was anything less than official and approved by Bernie Sanders himself. By the time Sanders came forward to repudiate the document and deny its official status, the damage was done. The rift was already beginning to widen.

Warren responded that she was "disappointed to hear that Bernie is sending his volunteers out to trash me," and she sent out a fundraising email that asked both for donations and for supporters to share personal stories and perspectives to contradict the framing of her base as elitist. If that had been all, then it might have been easy to move on and return to a mutually supportive stance within a few days. But the real damage was done when people close to Warren, perhaps in an effort to retaliate, spoke to CNN about a private conversation the two had in 2018.

Back then, the thought of actual voters making actual choices seemed distant and abstract, and the candidates sat down to discuss strategies against Trump and to establish the general truce that has held until now. Everyone involved seems to agree on those points, but differing reports emerge when it comes to the topic of gender. As CNN reported, Warren laid out her strengths as a candidate: "She could make a robust argument about the economy and earn broad support from female voters." Bernie was not on the same page.

According to anonymous members of Warren's team, Bernie didn't think a woman could win. Bernie shot back with his own version of events, saying, "It is ludicrous to believe that at the same meeting where Elizabeth Warren told me she was going to run for president, I would tell her that a woman couldn't win... What I did say that night was that Donald Trump is a sexist, a racist and a liar who would weaponize whatever he could. Do I believe a woman can win in 2020? Of course! After all, Hillary Clinton beat Donald Trump by 3 million votes in 2016." When Warren herself was finally convinced to weigh in directly, she urged people to move on, claiming that she was more interested in what she and Sanders agree on… But she also confirmed the more inflammatory version of events: "Among the topics that came up was what would happen if Democrats nominated a female candidate. I thought a woman could win; he disagreed."

While there is certainly a conversation to be had about to what extent America remains too sexist to support a female candidate, it seems like a stretch to accept the idea that, in 2018, Bernie would hold such a categorical view against the possibility of a woman being elected president. What makes it particularly questionable is the existence of footage from a C-SPAN appearance three decades earlier, in which Bernie says, "In my view, a woman could be elected president of the United States. The real issue is whose side are you on? Are you on the side of workers and poor people, or are you on the side of big money and the corporations?"

bernie c-spanC-SPAN

The suggestion that Bernie's views have become more regressive since 1988 seems far-fetched. The inclusive, forward-thinking persona he has consistently presented to the public for 40+ years doesn't line up with this supposed private view. Then again, the idea that Warren would simply lie about Sanders' comments seems equally unlikely. Who you believe seems to depend largely on who you prefer, and the two camps seem to be moving further from each other as the Iowa Caucuses close in. On one side, Bernie Sanders is a sexist; on the other, Elizabeth Warren is a liar.

Without a recording or a transcript of the conversation, it doesn't seem quite justified to land in either of those camps. Without third-party witnesses, the basic facts of who did and who said what can quickly dissolve. The message that was intended and the message that was received crystallize in each person's mind to the point that they become irreconcilable. Perhaps Bernie did think that a progressive man was better poised than a progressive woman to counter Donald Trump's brand of populism in the 2020 election. Maybe his way of saying so was so clumsy that Warren took it as a broad statement about the viability (or lack of viability) of female candidates, and she recounted it as such to people close to her. Short of calling either of them a liar or worse, that is the best I can muster—a version of events that I prefer to believe in order to maintain my respect for both of these candidates.

Supporters from both sides will no doubt find this middle-ground unsatisfactory. The rift feels real right now, and it's starting to seem like each side is trying to undermine the chances of the other. But while only one candidate can win the nomination in the end, their support draws too much from the same pool of voters to allow this rift to remain. Already Bernie supporters who also donated to Warren are turning against her with the hashtag #RefundWarren. But the sad truth is that neither can win in the general election without support from the other's ardent fans. And who really stands to benefit from continued fighting? The center and the far-right. It can only help Joe Biden and Donald Trump. And Donald Trump seems to know it...

If Sanders and Warren can't each count on the other's supporters to get behind them as the primaries shake out, then Biden will likely hold onto his narrow lead. And if one of them does manage to get the nomination with this acrimony still hanging in the air between them, no amount of campaigning for one another is going to muster the sort of passion that we can count on to overwhelm Donald Trump in the general. 2016 should have taught us that much.

This feud needs to end now. Warren and Sanders need each other, and our country needs them. They are the only candidates taking America's economic divide seriously, and the only candidates willing to tackle climate change with the resolve and transformative action it requires. If Donald Trump gets reelected, he will continue to make both of these problems far worse, destroying hope for economic justice and a sustainable future. If Joe Biden is our next president, then we will go back to enacting middling, inadequate reforms—one step forward for every two steps back.

Hillary 2016Hillary supporters as 2016 election results came inGetty Images

Warren and Sanders, united, represent our only real hope. Of course, they each believe that they are best suited to the job. They wouldn't be running otherwise. But if either of them is going to win, they need to come together, reaffirm progressive unity with one voice—acknowledging the differing accounts of events and decrying sexist limitations. Either of them can win this election, but neither can do it alone.