Monday, June 25, 2012

Got a Story of Student Loan Debt?

Posted By on Mon, Jun 25, 2012 at 1:45 PM

Earlier this year, the Consumer Financial Protection Bureau announced that the total amount Americans owe in student loans topped $1 trillion, distributed among some 60 million of us. Between 1982 and 2007, the cost of education has risen 400 percent—an increase rivaled only by the cost of medical care and well above the rise in wages.

The facts paint a dazzlingly convoluted picture. There’s no question that student loans are a problem; the question is characterizing that problem from the standpoints of individual choice, financial responsibility and the overall health of society.

Boise Weekly is working on a long-term story looking at the realities of student loan debt, and we want to hear what you have to say about your own.

What can we do to make higher education more financially accessible? Have we oversold the value of a college degree to young people, or have economic factors contributed to runaway education costs that threaten the missions of our colleges and universities? How do we strike a balance between education’s cost and value? Boise Weekly poses these questions to you, the reader. We want to hear your thoughts and experiences regarding the cost and value of higher education.

The benefits of receiving a college education are spelled out in the numbers. The average college graduate’s career earnings come out to $2.1 million, compared to $1.2 million in lifetime earnings made by those without college degrees.

The catch is that for many attending college entails racking up debt that may stretch over the course of their working lives. National Public Radio reported that one-third of 2011’s cohort of graduates have loans with more than 20-year payment plans.

Meanwhile, a floundering economy and debt-ridden state and federal governments have combined to make access to higher education more difficult. Starting Sunday, July 1, federal Pell grants that aid financially struggling students will decrease in value and the number of recipients as part of budget-slashing resolution H.R. 1. The interest rates on federally subsidized Stafford loans will double from 3.4 percent to 6.8 percent on that same day.

On the state level, California Gov. Jerry Brown slashed the University of California budget by $100 million in 2011 as a step toward meeting a $15.7 billion budget shortfall. Brown’s budget proposal will also reduce spending on Cal Grants to students attending for-profit colleges by $38.4 million.

Then there’s the education bubble. Financial institutions trade and sell higher education debt—so much so that in some cases debtors have trouble ascertaining who owns their debt, and even how much they owe. As the earnings of college graduates drop, the value of that debt may collapse, contributing to a bursting of the education bubble in much the same way as the 2008 housing bubble.

Some have argued that if the government forgave student loans, money that would otherwise go toward paying off those loans would be spent on consumer goods and new homes and taxes, boosting the economy. It’s a controversial argument, since forgiving debt would add to the debt of the federal government and not address the underlying factors behind the rapidly rising cost of education.

If you have a personal story or thought about student loan debt you're willing to share with BW, email your name, contact information and a bit of your story to Features Editor Deanna Darr at


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