Student Debt Hits $1 Trillion: The People, Politics, and Philosophy Behind The Number
By Brett Chamberlin
In an age in which economies and governments are defined by numbers far beyond human conception, here’s another one: one trillion dollars. That’s $1,000,000,000,000 — or approximately the amount of all student debt in America.
Wednesday was declared One Trillion Day by the Occupy Student Debt campaign, symbolically marking the date the portentous 10-digit landmark was reached — although estimates of the actual amount do vary.
To mark the date, students and Occupiers from universities across the city rallied in Union Square. There, the several hundred protesters participated in mic checks, listened to radical gospels sung by Reverend Billy and the Stop Shopping Choir, and watched a piece of street theater featuring a showdown between student debtors (dressed in orange jump suits reading “PROPERTY OF SALLIE MAE”) and “Members of The 1%.”
An energetic redhead moved through the crowd, inviting people to write and display their total student debt on stickers. “I’m here today because Sallie Mae calls me ten times a day,” said Cara Hartley, who graduated from Indiana University in 2007 with a degree in English. Five years later, still $40,000 in debt, she works at a restaurant and says she struggles to buy food and pay her rent. “I just don’t feel like this system works,” Hartley said. “It’s set up to create indentured servitude.”
Across the square, another recent graduate told a similar story. Gailbert Rosa bears $22,000 in debt and works as a delivery boy at two restaurants. “I’m definitely happy that I have a job,” said the sociology graduate, “but I want to work where I can use my degree.” As an act of protest, Rosa intends to refuse to pay back his loans. “I don’t think you should pay to go to college,” he said. “It’s something that benefits society.”
Rosa invokes a concept often mentioned by NYU president John Sexton. When questioned about shortcomings in financial aid at his occasional Town Hall events (as he invariably is), Sexton points out the transformation of higher education from a public good to a private good. As public funding for universities dries up, the cost for students to attend college has risen more than 600% in the last three decades. Today, higher education is seen as a private investment: Students leverage their own future by taking on debt to get a degree, with the expectation of higher income after graduation. In a piece titled “The Research University in a Global Context,” Sexton writes about a parallel issue, ownership of intellectual property created by a university; however, the theory is much the same, substituting individuals for institutions:
“On the one hand, we might take the position that the knowledge created by our faculty in our labs and offices is something we own and that we are free to capitalize it as a private good; or, we might hold to what has generally been, at least outside of contemporary science, the tradition that the ideas flowing from our institutions are common or public goods. Especially as governmental support for universities diminishes, as our own need for resources grows, and as the ability of universities like [NYU] to support the knowledge agenda through constantly increasing tuition declines, research universities in particular will be tempted to act more and more like commercial institutions.”
With student debt now surpassing consumer credit debt, there is a mounting fear that this is another bubble ready to burst. Two thirds of all student debt is held by graduates under 30 years of age — and nearly half of recent college graduates are unemployed or underemployed. As a result, delinquent loans are beginning to rise.
The trigger for the 2008 financial crisis was rising interest rates associate with adjustable-rate mortgages. Now, a similar phenomenon may be around the corner for student debtors. On July 1, the interest rate for federal student loans will double to 6.8%. In a sure indicator of the gravity of the situation, both President Obama and Mitt Romney have called for Congress to freeze the rates.
“I believe college isn’t just the best investment you can make in your future — it’s the best investment you can make in your country’s future,” President Obama said this week at a campaign stop in Iowa, echoing Sexton.
Back in Union Square, two Cooper Union students held aloft an enormous cutout of the enormous number that inspired the day of action: $1,000,000,000,000. Taylor Hand, a Cooper Union student who held one side of giant prop, was still absorbing the recent news that her school, completely free to attend for 110 years, would begin charging tuition to its graduate students. “I just don’t want to believe in it yet,” she said. “It seems unreal.” Hand, who called Cooper Union “a socialist dream,” said that “the injustice is so great as to be overwhelming.” She glanced upwards at the blue “$1,000,000,00,” our symbolic financial burden. “So is the number.”
Video by McKenzie Beehler and Jorge Morillo
