Much of what we are reading these days about the massive problems of student debt was presaged long ago.
Leave it to William Shakespeare to warn us. He did it in his play, “Hamlet.”
Polonius, an aide to the king, is offering advice as his son Laertes prepares to leave Denmark for Paris to continue his education.
“Neither a borrower, nor a lender be,” Polonius counsels.
Centuries later, the advice remains sound, and with the gift of hindsight generations of borrowers might wish they had spent more time studying Shakespeare and pondering his timeless wisdom.
What the Bard could not have foreseen is how expensive college has become in the 21st century – or the almost casual willingness of students to take on large amounts of debt to finance a college education. It remains an almost unshakable belief in this country that a college education enhances the chances for a better job upon graduation, despite growing evidence that this may no longer be universally true.
Fortunately, in New Mexico the future for college students and costs is bright. We are one of only two states in the country where students can attend college for free. The state now offers the “New Mexico Opportunity Scholarship” and the “New Mexico Lottery Scholarship,” as well as over 25 other scholarships, grants, and financial aid packages.
Students from past years in our state, however, still have debts from loans.
What is universally true is that college is expensive in this country. There are universities in the U.S. that cost $100,000 a year and up to attend and we are not talking about medical schools or similar programs that offer advanced education and degrees. We are talking about schools where graduates are earning a simple bachelor’s degree.
But even graduates who land better jobs than they might have without a degree often face decades of crushing debt because they financed their degrees with borrowed money.
The federal student loan program that originated in good intentions and once met a legitimate need has become a debacle that seems impossible to untangle and has left legions of college graduates drowning in debt. But the simple solution favored by many – the government simply forgiving all or large portions of those loans – is a horrible idea.
The process and procedures for obtaining and then paying for these loans has been broken for decades, and fixing it is far from simple. The numbers involved in student loans are staggering and almost impossible to grasp:
• Total student debt is more than $1.7 trillion.
• In excess of 45 million persons are responsible for that debt.
• About 30 percent of the debt will never be repaid
• Somewhere around 40 percent of those holding the debt will not graduate
• Almost 80 million citizens have borrowed money in the form of student loans.
• In New Mexico, outstanding student loan debt is listed as $7.4 billion. There is an estimate that the monthly payment on these loans for New Mexicans is $269 a month or just over $3,000 a year. That cuts deeply into a person’s disposable income – and truth be told, many people will opt for a new car, a better apartment, or a vacation rather than make a payment on a loan taken out years before to meet a need long past.
Where federal loans are concerned, the government faces problems collecting the money, and there is no question that the debt weighs heavily on graduates who may not have fully understood the magnitude of the financial burden they were taking on. But just wiping those loans off the books is not a viable option.
Aside from the loss to the taxpayers, such massive debt forgiveness encourages the notion that individuals do not have to meet their obligations, whether personal or financial.
Fixing the student debt crisis should begin with a plan to make college more affordable in the first place. Beyond that, the government needs to more carefully monitor the available loan programs, which are often unregulated and unfair to students.
If the government is determined to provide relief and taxpayers are amenable to the idea, perhaps a system that favors the economic underdog, the more disadvantaged among us, could be implemented on a limited basis. But, again, the main culprit in this dilemma is an education system that desperately needs to be reexamined and revamped.