With the country's national debt flying higher than a bald eagle, the Deficit Reduction Act of 2005 should have come as welcome news. Students and educators, however, worry that some of the bill's provisions will only exacerbate an already massive problem: individual student loan debt. The bill, reports Aaron Block from the San Antonio Current, raises interest rates on both parent and student loans from 7.9 percent to 8.5 percent, which will ultimately add almost $5,000 to the average recipient's debt load.
That's not an enticing prospect, since undergraduates are leaving school with an average of nearly $20,000 in debt, reports Mischa Gaus for In These Times. More than any other generation, the 'millennial generation' -- those born after 1978, roughly -- is facing college debt that, when adjusted for inflation, is three times what graduates faced only a decade ago. And that debt will most likely extend far into their working lives: Gaus reports that the US Supreme Court recently ruled that Social Security income can be garnished to pay for outstanding college debt.
As students get loaded beneath mountains of debt, they are encountering a 'new way of working that is much more short-term and mobile,' says Sara Horowitz, president of Working Today, a New York-based advocacy group. Instead of climbing the metaphorical career ladder -- and chasing the stability and benefits that are supposed to go with said ladder -- college graduates are leapfrogging from low-paying job to low-paying job, bereft of benefits like health care and retirement plans as they struggle to meet their monthly debt payments.
In some respects, the situation is just as twenty-somethings would have it -- an itinerant lifestyle seemingly lends more freedom, and this is an enticing prospect for a generation that romanticizes the postponement of adulthood. The situation is, nonetheless, dangerous in many regards. For while businesses and young employees alike may celebrate the latitude that transitory employment breeds, Anya Kamenetz, author of Generation Debt: Why Now Is a Terrible Time to be Young, thinks the jubilation is misguided. Businesses, she says, have 'gotten people to accept intangible benefits instead of old, actual benefits.'
Not everyone, is seduced by this romantic vision, reports Scott Moyers in the Southeast Missourian. As students graduate with spectacular amounts of debt, some are taking a pragmatic tack: '[I]nstead of a student choosing something they're most interested in, they may choose something that will make them more money.' The debt load a college education incurs can influence a student's decisions from matriculation onward, guiding their choice of major and job. The education that was supposed to open doors for them can, paradoxically, chain them to a job or profession that offers a modicum of financial stability instead of emotional fulfillment.
Laden with debt, college graduates appear to be facing two options: either chase a romantic vision -- credit score be damned -- or pursue tangible benefits in a dwindling, contingency-based labor system. And the fallout from this choice means the freewheeling, itinerant grad may be becoming a thing of the past. The legal and financial picture surrounding higher education is such that education without debt is increasingly rare, and with last year's stringent adjustments to bankruptcy laws, Gaus notes, it is now 'nearly impossible to discharge educational loans.' The new cost of higher education, it seems, is not a corrupted mind but rather what Gaus calls a 'chasm of liabilities.'
Go there >>Hey Millennials, Debt Becomes You
Go there too >>Mortgaging the Future
- For Graduates, Student Loans Turn into an Albatross
- Student Loan Debt Set to Soar
- Student Debts, Stunted Lives
Related Links from the Utne Archive:
- Bush Goes to School on Low-Income Students
- Higher Education For All
- Transcending the Quarterlife Crisis($$)
Comments? Story tips? Write a letter to the editor
Like this? Want more?Subscribe to Utne magazine