Picture the United States Without Student Debt

From Common Dreams

The act of cancelling student debt will benefit the entire economy.

'These students played by the rules, and were caught in a trap that was not of their own making. We need to free them, and ourselves, from that trap.'
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Picture the United States without student debt. It's a country with a larger, more vibrant economy than the one we have today. It's a country where more than a million people, including many people who never went to college, have jobs they would not otherwise have.

A new report from Bard College's Levy Economics Institute concludes that this bold idea -- cancelling all outstanding student debt -- would help the entire economy and create more than a million jobs.

To those who say we can't afford to cancel this debt, the report poses a new and different question: Can we afford not to?

Using widely-accepted economic tools, the report's authors -- Scott Fullwiler, Stephanie Kelton, Catherine Ruetschlin, and Marshall Steinbaum -- found that cancelling all student debt this country would create between 1.2 and 1.5 million new jobs. It would also increase the nation's GDP by $86 billion to $108 billion per year over the next 10 years.

It makes sense. More than 44 million Americans now owe nearly $1.5 trillion in student debt, and the numbers continue to grow. Individual students are graduating with levels of debt that were unknown (and are often unimaginable) to people of earlier generations. This indebtedness affects their friends, their families, their communities, and our nation.

Millennial-led households are poorer than those of any other generation, and student debt is one of the reasons. The Federal Reserve Bank of New York concluded last year that college costs, particularly student debt, have led to declining rates of homeownership for millennials. Student debt has been linked to lower spending in other areas, too, from cars to restaurants.

The National Center for Education Statistics conducted an in-depth survey of one millennial group, the sophomore class of 2002, and found that student debt was more prevalent among females than males. It was also more likely to affect black students than students of other racial and ethnic groups. One borrower in four said they had to work more than one job, one-third said they took a less desirable job, more than one-third said they worked more hours, and 37 percent said they took jobs outside their field of study.

In a very real sense, society has broken its promise to these young people. They were encouraged to attend college, and were told that their loans would pay off in the long run. That hasn't proven to be true, through no fault of theirs. But, instead of honoring them for their effort, our media culture seems intent on stigmatizing them.

Consider this article, "4 Ways You Can Build Your Family's Finances," from something called "The Good Men Project." The article offers "a few tricks" to mitigate the effect of student debt. It celebrates one "Student Loan Hero" who "discovered she could save a minimum of $2,500 per year not having her car."

The article continues:

"If you comb through your bank and credit card statements, you might find spending patterns you could potentially break. For example, maybe you thought you were spending only an average of $20 per week on coffee when it's closer to $40 per week."

Another article, this one from Forbes, exclaims: "This 30-Year-Old Couple Repaid $120,000 Of Student Loans In 3 Years." How did they do it? "We both work at minimum two jobs and anywhere from 60-80 hours each week," says Ben, the husband.

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