We have all seen the memes and the financial self-help guides chastising our generation for not having the financial capital our parents did at our age. If only we ate less avocado toast or went on fewer vacations, then maybe we would be buying houses left and right. All this, despite the fact that last year, for the first time ever, Americans on average saw greater increases in their home values than income from their jobs.
What we know is this: Since 2013, the net worth of college graduates aged 25 to 34 has dropped from $9,000 to a shocking negative $1,900.
More people than ever are going to college, doing what we have been told from kindergarten will guarantee a well-earning, fulfilled life. In return, though, we are being saddled with debt and on track to be the first generation worse off than our parents since the Black Death decimated Europe in the 14th century.
Tuition at Rutgers averaged across the three campuses, has almost tripled since 2008 and has increased sevenfold since 1990, when a lot of our parents would have been graduating if they went to college. This increase in costs has simultaneously seen an explosion in student borrowing, where at Rutgers the average student graduates with $21,980 in debt, according to the Department of Education.
This is equivalent to the estimated costs for one year at our university, which means we are graduating in more debt from our time in college than it cost our parents to pay for their entire degree. And the average student loan debt, looking nationwide, is close to the maximum we are allowed to borrow from the federal government. Is it just me, or is this starting to seem kind of ridiculous?
The student loan crisis is reaching a fever pitch. Yet it is broadly misunderstood, compared in media reports to car loans and spoken of as a problem only for the rich or soon-to-be elite. But middle-class families and students have been hit the hardest by the rising cost of college, owing an average of $43,135 in 2021.
And total college debt is the second-largest source of debt in the country, trailing only home mortgages. What makes student loan debt unique is how large the loans are and how uninformed some of us tend to be, resulting in default rates of nearly 15 percent. Recently this problem has ballooned, representing a sizable financial hurdle for millions to overcome in pursuit of the security a college degree was supposed to offer.
Some politicians and former education officials, recognizing the scale of the issue, have called for the elimination of all or some of our student debt.
The issue inspired a spirited debate during the 2020 Democratic Presidential primary, with Left-wing candidates like Sen. Bernie Sanders (I-Vt.) pledging to forgive all federally-backed student loans and eventual primary winner, President Joseph R. Biden Jr. promising to eliminate up to $10,000 once in office.
Such relief has yet to materialize, with the administration opting instead to repeatedly extend pauses on student loan repayment throughout the coronavirus disease (COVID-19) pandemic, a move that instead of solving the problem, leaves more than a year of loan payments hanging over borrowers’ heads.
Conversations concerning just student loans — regardless of how pressing — are still just half the picture. In my opinion, canceling debt is the right thing to do and would not only strengthen the economy but also lifts a serious weight from millions of students across the country and here at Rutgers.
But without addressing the cost of college, debt will continue to pile up. On this front, New Jersey has made some recent progress.
The “Garden State Guarantee,” a recent initiative of Gov. Phil Murphy (D-N.J.) makes Rutgers and our state’s other four-year public schools free to students whose families make under $65,000 a year and caps tuition at $7,500 up to incomes of $85,000. This is an excellent plan and will increase access to college while also affecting nearly 8,000 current undergraduates.
We should also be lowering tuition overall and raising more state funds for public education from pre-kindergarten through college, but this plan demonstrates a serious attempt at addressing affordability for the neediest of New Jersey’s students. We cannot choose between debt relief and lowering costs. They must go hand in hand.
Biden should use his executive authority to cancel student debt, and more states should follow Murphy’s lead in forging a path for low and middle-income college enrollment.
Ben Donnelly-Fine is a School of Arts and Sciences junior majoring in philosophy and minoring in history. His column, "Existential Red," runs on alternate Mondays.
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