The Issue that Plagues Our Youngest Voters – Student Debt

 

There are certain issues that younger voters are particularly passionate about. As the generations most impacted by climate change, that is probably the greatest differentiator among this younger demographic cohort. As the most college educated generations in American history, they cherish science and facts; they are much less likely to follow populist conspiracy theories. But when it comes to economic issues, even beyond the affordability of decent housing, one burning issue rises to the fore: the cost of post-secondary school education and the concomitant oppression of massive student loans.

The levels of this crushing debt start with for-profit trade schools, many promising employment that never materializes, and escalates to four-year undergraduate degrees, where an average per student debt loan is approximately $40 thousand. These loans are payable regardless of graduation. While the federal government, as a lender, is more lenient and allows forgiveness under more convenient policies, and while bankruptcy laws have been amended to make such loans more easily dischargeable, for the majority of students with such debt loads, the need to repay has had a material impact on other significant life choices, from jobs to housing and even to marriage. 

Facing a GOP filibuster in the Senate, Biden’s efforts seem to be limited in this arena, focusing initially on disabled students with heavy debt loads. The Congressional budget reconciliation process, which circumvents a filibuster, is unlikely to provide the relief from such debt demanded by young workers, entering a still-pandemically-challenged job market with trepidation. Remembering that a college degree or at least a highly-specialize trade skill are the job equivalent of a high school degree two generations ago, the societal impact of this rising in student loans – now eclipsing the aggregation of all U.S. credit card debt – is pervasive and materially impactful on us all. These debt-burdened first stage workers simply are not able to spend as much on home or car buying or just participating fully in our economy.

But if undergraduate education imposes stressful student debt, carry that stress one step forward. For those seeking additional higher degrees, particularly in the “professions” (business, law, dentistry, medicine, engineering), take that undergraduate debt and add the next level of much higher tuition. Six figures of debt for medical, business and legal “terminal degrees” typically launch into six figures. Serious six figures for some, as you add in their accumulated undergraduate debt. NYU surprised its medical students, when a generous benefactor paid off a graduating class’ aggregate debt. But staggering debt is increasingly the rule, even as comparable educational costs in highly educated Germany hover vastly closer to free. 

Since we cannot compete in a technologically advanced world without sophisticated and advanced higher education, we face the consequences of making students bear egregious tuition and years of not being paid (or horribly underpaid as young MD’s discover during residency and fellowship)… as the interest from their school debt continues to roll.

Since I am a lawyer, I thought it might be interesting to look at what law students face, in a world when those at the top of the food chain working for chichi Wall Street firms start with serious six figure pay, while those from many law schools struggle to find jobs. The American Bar Association Weekly Journal (a piece by Stephanie Francis Ward, published September 24th), asked recent law school graduates about the value of their education and the impact of its underlying cost.

A survey released Tuesday [9/21] asked young attorneys if their legal education was worth the cost, and fewer than half said yes. However, 60.9% of respondents said that if they had to do it over, they would still attend law school.

The data is part of a report, Student Debt: the Holistic Impact on Today’s Young Lawyer, published by the American Bar Association’s Young Lawyers Division [YLD] and the AccessLex Institute Center for Legal Education Excellence. A group of more than 1,300 YLD members under the age of 36 in a variety of practice areas made up the survey pool. Of all respondents, 61% were white, 17.4% were Latinx, 6.8% were Black, 4.2% were Asian, 4.1% were multiracial and 2.2% were Indigenous, while 3.5% did not report their race.

The report ties in with the ABA’s Student Debt Week of Action, which includes a livestream event on the YLD’s Facebook page, according to a news release. In 2020, as part of the ABA’s annual Profile of the Legal Profession, the YLD released a survey of 1,084 attorneys, whose median age was 32. The median cumulative figure for students reporting their debt load was $160,000.

Respondents in the 2020 survey indicated their student debt led to life-changing decisions, such as delaying children or buying a home and, in some cases, choosing a job because of its higher pay.

The 2021 survey, which was compiled in the spring, took a deeper dive into those questions, with data parsed out by loan amounts and race. Among respondents reporting more than $200,000 in law school debt, 18.4% were Black, 14.4% were white, 8.3% were multiracial, 7.2% were Latinx, 7.1% were Indigenous and 6.8% were Asian.

Respondents were asked if their student loan debt prevented them from saving for an emergency fund. In the case of Latinx respondents, 48.6% said yes, as did 45% of multiracial respondents, 44.8% of Black respondents, 44.2% of white respondents, 34.1% of Asian respondents and 28.6% of indigenous respondents.

A small number of respondents didn’t have any law school debt at graduation. No Black attorneys were in that category, and the racial group with the highest percentage was Asians, at 11.4%. Additionally, 9% of those respondents were Latinx, 7.1% were Indigenous, 5.1% were multiracial and 3.5% were white…

Among respondents with more than $200,000 in student debt, 36.4% indicated they could not qualify for loan, mortgage or apartment rental without a cosigner. That was also true for 23.6% of respondents who had between $100,001 and $200,000 in student debt… Additionally, 43.5% of respondents with more than $200,000 in law school debt reported their credit scores had been adversely affected. That was also true for 29.9% of those with debt between $100,001 and $200,000.

Among respondents with more than $200,000 in law school debt at graduation, 56.5% reported they would still get a law degree if they had it to do over… Respondents were also asked if their legal education was worth the cost, and only 47% agreed with that statement. There are public interest loan forgiveness programs, but these programs impact a very tiny percentage of lawyers who actually work in public interest professions. Law school full professors make serious six figure salaries – highest in the most prestigious schools – with lucrative consulting monies available beyond those numbers. 

In the end, we could trade years of public services for tuition relief. We could take a perpetual piece of a tuition subsidized student for life, to be added to his or her tax bill… or we could understand that the value of educated people does a whole lot more good, creates a much more vibrant economy, than simply reducing taxes for the rich. And maybe, just maybe, we just might be able to fill all those unfilled STEM jobs from American graduates as opposed to luring foreign graduates.

I’m Peter Dekom, and if we can waste trillions of dollars by reducing corporate tax rates for rich folks who really do not need that money, we sure as heck should be able to educate our young without imposing crushing student debt.