College Debt

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When I started college at Memphis State University (now the University of Memphis) in the fall of 1979, my tuition bill for the first semester was $187, for a full-time load. There was a $5 athletic fee (which was new), and the books cost about $100. I still have a couple of them. Parking was $15 for a year. The dormitory was about $300 a year, if I recall rightly. 

So, for just under a thousand dollars a year, I could progress toward a B.A. In today’s dollars, that is about $3650 a year ($1825 a semester). It wasn’t a fraction of what it actually cost educate me. The state and federal government paidthe difference. My professors were comfortably middle-class, the library was full of books, the University staff was decently paid, and the campus was functional. It worked. People came, they studied, they graduated into productive lives without a lot of debt.

If today’s costs were comparable to when I was in school, not that many students would be in debt, and those who are would be able to pay off the debt fairly quickly. The cost to the student would come to about $14,560 for a four-year degree –in today’s dollars, if things were the same as when I went to college. If you work part-time, pay as much as you can as the bills come due, and get a little help from relatives, you’re out with 5K debt, max. The public pays the rest of the cost, just like they once did. 

SIUC (very much comparable as an institution to Memphis State) is currently close to $10k for tuition, another $10,186 for room and a meal plan, $1,100 for books and supplies and $4,382 for other fees. It’s $25k a year. Your total cost for four years? Let’s just say 100K, because you aren’t going to graduate in four without a little summer school. You can’t come up with that much by working part-time and getting reasonable help from relatives (unless your relatives are rich). Everybody knows this.

Your earning power hasn’t improved since I was 18. (In most categories it is down). These numbers from nine years ago look worse today.

Still, at 18-21, you can probably come up, well, about that same $3650 a year (in today’s dollars) that it would have cost back in my day (at $1000 a year). And it shouldn’t cost you more than that to go to SIUC. Illinois should move toward free tuition for all Illinois high school students with a C average, with a program like they have in Georgia. But with the state’s finances in the mess they are in, a more reasonable goal is to return to what students would have paid back in the day when student debt was not a crisis. This will help us keep our Illinois high school graduates in Illinois.

So, over four years, right now, you can probably get an extra $14,600 (above your living expenses) by working your butt off and tapping your relatives. You can do the math. You could go to college. But with today’s costs, you have 85K in debt if you do it that way. Not many people end up with that much debt for a BA, but that’s because they are working full-time, asking more of their relatives, and taking as many courses at Community College as possible, for a much lower price. All very understandable, but still not what we want for the future.

 

In southern Illinois, you can buy a livable house for the amount of money you are generating, in costs and debt. College debt gets you nowhere in the world. A mortgage does increase your value in the world.

So, if you took on college debt, you didn’t buy a house. You bought a lifetime of paying the man just to get a shot at the dream. The house is extra. Makes a person think twice about majoring in theater or art history or philosophy.

I graduated with precisely $1400 in debt, in 1986 (I wasn’t the most devoted student back then, so it took a while to finish). My debt was paid off in two years. My parents helped. And that could have been you. Debt free at 24. Ready for whatever comes next. That could have been you, if not for . . . a change I want to talk about.

What happened?

The answer is short and simple and sour. Republicans happened. In 1980 the country was faced with a choice between Jimmy Carter and Ronald Reagan. I voted for John B. Anderson (bless his noble soul). He demanded Richard Nixon explain his abuses of power, and wanted to raise gas taxes and cut Social Security taxes (which would still be a decent idea). I could agree with that much, at least. It was my first vote for President. I stand by it.

Reagan swept into office and destroyed our tax structure, declared war on unions, and substituted personal greed for the idea of the public good. The man said, in essence, “keep what you earned, screw the general welfare.” He then wrote billions of dollars in “hot checks” (as Lloyd Bentsen rightly called them ), and the USA started living on foreign credit. If you think you’re in debt to the loan companies, you should ask the Chinese how much you are paying them every year in interest.

To pay off our national debt, every man, woman and child in the US would have to cough up about $48K, but every year we pay interest on that debt of over $310 billion dollars. The percentage of the federal budget servicing that debt is about 8% which means that 8% of your taxes are being paid out in interest every year. (It actually isn’t quite this simple, but the principle is sound.) So, if you pay 10K a year in taxes, about $800 goes to pay the interest on the debt. You get nothing for that, not even an education. Otherwise, it is like your college debt. It builds nothing for your country. It is simply thrown away.

A similar situation holds in the case of Illinois, except that the Federal Government gets far better interest rates than Illinois gets. We have created a debt that is pretty weird, because we had to borrow from ourselves (raiding the pension fund) to meet statutory requirements, and then finance our debt at junk bond rates. The world of being in debt sets your teeth on edge. You try to pretend it isn’t there, but it is and you are helpless. It makes you willing to be surveilled, makes you willing to pay mercenaries to do your public and private dirty work, sending governors and public servants to prison, and to politicians who feel they are not bound by rules of law and decency. It makes you turn the other way as the police are militarized and take life without sufficient cause, and you paid for it. You are just trying to hold onto your own place in this mess. You haven’t got time or energy or courage to stand up for your fellow citizens.

Debt makes you passive, obedient, afraid to rock the boat, afraid to demand your rights, unwilling to demand good government. Debt does all that, and it starts in college. 

What is the solution? It isn’t that difficult. But the handful of people who are benefiting from our debt and our misery don’t want you to understand this.

If we, as a public, could afford to educate me from 1979 to 1986, we can afford to educate you, and yours, right now. It doesn’t cost more now than it did then, when adjusted for inflation. We can afford it, but our politicians don’t choose it. They think you will vote them out of office if they direct our resources to such projects. They think you want more for the police state. But your real safety lies in your education and that of others, in refusing to accept endless debt as a substitute for your freedom and your future.

What do we need from you? We need your $3650 a year, but maybe not even that. It’s a drop in the bucket anyway of what it costs to educate you. It’s purely symbolic. We can afford to educate you for free. Most of the countries in Europe do it that way. What we need is a tax structure and allocation that makes sense, as it was back when educating the citizenry was held to be a value we could not afford to neglect. The public should pay for your education and you should seek that education not for your private advantage, but to become a citizen who can serve the nation, your state, and your neighbors by means of your economic productivity and your own taxes.  

If we can find a way to avoid debt, and to work toward relieving the debt of people who already bit the bullet and borrowed for college, I want to ask something of you. You must promise to use the money you are now paying in interest and principal in order to help your community. You must promise me first to pay off your other debts (all of them, especially credit cards), and then to save half of what you were paying in interest. Then, promise me to spend the rest on durable goods and long-term investments that rebuild small business and housing stock in your town and region. If enough people do this, we will, in a pretty short time, no longer be owned by corporations and financial concerns that love us to live in debt.

Please do not become a consumer, become a citizen. Don’t let the greedy people convince you that you have to consume to feel good. Wal-Mart does not need your money. Your local community does. Learn to see your local and state taxes as an investment in the good of your fellow citizens, not as the wasteful work of a wicked government. The Reaganites want you to believe that tax money is wasted, unless it is spent on the military and police “protection” and on surveillance. But they waste 8% of your budget every year paying interest on the debt they accrued in your name to have this big greedy Wall Street-to-Wal-Mart party that has been killing us for decades.

Enough! Encourage your government to move toward paying off the national and state debt. I have some very practical ideas about how to do this. Send me to Springfield.

But for the moment, what do you suppose would happen to our nation’s and our state’s economies if your college debt became an asset you can use for building your life instead of money down the toilet? I’m not asking you to sacrifice. I’m asking you to demand of your government that it be sensible. I will demand that for you and for all of us. And I won’t shut up until they get it. Keep reading.


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  • Randy Auxier