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The Real Tragedy of Student Debt

A young, working-class woman shares the story of her subtle slide into unbearable debt.
There's been a lot of talk lately about increasing levels of student debt. With all of the fuss, you'd expect that lucky high school seniors receive a sobering invoice with their college acceptance letters. But for many students, the plunge into debt is much more insidious. Like drug dealers, the lenders start small and cheap, lulling students into a false sense of security. By the time the full effects of debt creep in, it's too late.

I hope that my experience will shed light on similar stories unfolding across America, illuminating the impossible choices that meet working-class students. It's also a cautionary tale for countries seduced by the false promises of private college education financed by student loans and credit cards.

At my working-class high school in Connecticut, I was always a top student. The overwhelming message for high achievers was that brains, determination, and charisma would lead to success in any career, and I dutifully pursued volunteer work, leadership training, part-time jobs, and anything else that would 'look good on the resume.'

My hard work paid off when I was accepted for a prestigious early-entrance program at the University of Southern California. The Resident Honors Program (RHP) selects 'exceptional and highly motivated' students to begin college a year before graduating high school, recruiting from the top 4 percent of sophomores nationally. From a pool of 25,000, between 30 and 60 join the program each year.

I got a $6,000 scholarship, along with $19,500 in grants and work study. In order to make the required fees and expenses of $28,000, I took out a $2,500 student loan my first year -- a manageable amount, I thought.

Once I got to USC, I worked for a month at a grocery store, then got a work-study job for 20 hours a week, $6 an hour. An irregular schedule caused me to miss RHP activities, and I had to skip some classes. But keeping my debts under control seemed worth it. My first summer home, I worked on a farm and earned $1,000 -- enough to buy my plane tickets.

My second year, USC's tuition fees increased by $2,000, and my mother's income increased by $1,000. Ironically, this pushed our family out of the 'low-income' category, and I lost half of my grant money. I considered transferring to a less expensive school, but USC's general education classes were so obscure that I'd have to repeat my freshman year anywhere else. So I held my nose and took out a $9,500 loan, hoping to apply for scholarships later on.

I got another work-study job -- on top of running two student organizations, taking honors-level classes, and dealing with a roommate from hell. Getting to the library was becoming impossible, so I took out a $1,500 loan to buy a laptop. It was my first experience of a private student loan, and I was told it wasn't much different from a federal loan. The interest was slightly higher, and there were slightly different rules, but overall it all seemed the same.

After Christmas, the overload became too much, and I had to prioritize. I decided that leadership and education were more important than meaningless employment, so I quit my job and took out another $2,000 private loan. I navely hoped that my education would someday allow me to earn more than $6 an hour.

My third year, I attended Edinburgh University in Scotland, where tuition fees were half of USC's. That year, I needed only a $4,000 loan, and didn't have to worry about a job. But the next year brought hardly any grant money, and rather than give up in the 'home stretch,' I took out more loans than I ever expected I'd need.

When I graduated in the summer of 2002, I was $36,000 in debt. My only consolation was that my debts were equivalent to one year's cost of attendance -- a bargain, really.

A shift from grants to loans hurts working class students

I moved back to my mother's house and began looking for a job. But in the recession following 9-11, employers wanted practical, predictable degrees, not esoteric subjects like anthropology. From seeking meaningful employment, I slid into looking for any job. I had a few days of temporary office work, a few months in retail. I went to Scotland in search of a better job market, but couldn't even get an interview before my money evaporated.

Since my degree wasn't helping me find work, I decided I needed a skill. I started a multimedia course at a community college, paid for with wages from a salon. But I soon discovered that my little laptop couldn't handle graphics work, so I bought a new computer with a private loan for $2,000.

Six months later, I finally got what I really wanted -- a meaningful job. I put multimedia on hold and began working as a union organizer. In exchange for 'unlimited hours' -- sometimes 70 hours a week -- the salary was excellent: $2,000 a month. I paid off my credit cards and started on the loans. By this point, with capitalized interest, my total debt was $43,000.

Six months later, I was burnt out. I could deal with the impossible hours, but it was an upward battle just to maintain the status quo for the workers I was helping. An overwhelming sense of futility made me wonder if anything was ever going to change, and I retreated to school to reconsider my goals and tactics. My loans were in deferment, giving me a little breathing room.

Eventually I came to the conclusion that multimedia could earn me a living, but I still wanted a career that would help disadvantaged communities. I applied to an 'alternative' master's program in Edinburgh that was ideal -- studying social change. I couldn't get any scholarships for an obscure foreign school, but I could finish in half the time of an American master's degree. I took out a private student loan for $18,000 and worked as a 'Santa's Elf' at a shopping mall (among other jobs).

As of finishing my master's degree, my debt hovers around $70,000 -- it will grow to over $100,000 by the time I pay it off. My repayment schedule reaches into my late forties, at $650 a month. If I do the kind of low-paid, meaningful work I want to pursue -- teaching, writing, grassroots organizing -- I will likely struggle to make each payment.

To be fair, I made the choices that put me in this situation. I attended an expensive university 3,000 miles from home. I stayed at that school, even though I could get a cheaper education elsewhere. I studied an impractical subject that I loved, then continued my studies at an obscure foreign university. I wasn't always aware of financial consequences.

Yet I made my choices based on the values I had been taught -- that helping others is more important than making money for yourself, meaningful career is more important than net worth, and brains, determination, and charisma are the key ingredients of success. I realize now that I subscribed to the fantasy of an equal society, when in fact everyone's options arise from class, race, gender, and a thousand other subtle differences in our experiences, assumptions, and privileges.

There are alternative models

My experience with higher education exemplifies the conundrum of the working class. Universities guarantee financial aid to low-income students, but often shift from grants to loans after a year or two. Students are expected to make higher contributions each year, even though upper-level classes are more demanding than introductory ones. Students are encouraged to take leadership roles in extracurricular activities, but working-class students have to fill their summers with meaningless low-paid jobs instead of volunteer work or internships, and are put behind their upper class peers.

Adding insult to injury, education gives a tantalizing glimpse of the wider world. For many, college is where they realize that their experience of injustice is not isolated, and many gain a desire to work for social justice. But to pay back their debt, graduates must forget their ideals and go to work for the highest bidder.

To put it in perspective, the average debt at graduation in America is $19,300. In the United Kingdom, it's $16,000; in New Zealand, $9,600; in Germany, $7,000. Most countries require repayment only when a graduate earns a certain salary -- in the United Kingdom, it's $28,000. In Germany, it's $14,500 -- but students enjoy a five-year grace period, subsidies for good grades, and forgiveness on all loans above $12,500. Sweden's grace period is three years, Holland's is two, and most countries in Europe forgive student loans after 15-25 years.

These different arrangements allow students to 'get on their feet' after graduating. New graduates have the time and space to find a niche, rather than getting trapped in the first job that comes along. They are allowed to engage in useful work without worrying about excessive loan payments, making contributions that aren't measured by the GDP.

Grants rather than loans also limit the flow of educated, desperate young people into the semiskilled labor market, leaving service jobs open to those who have not pursued higher education. While this contributes to social stratification, it also makes jobs available to people who need them.

In America, with its tangled webs of overpriced private colleges, usurious credit cards and bankruptcy-proof student loans, it's unlikely that socialized education would be embraced. Still, it's heartening to know that our system is an excessive anomaly -- most other countries make much better investments in their young people regardless of their class and race.

In many ways, this pattern is one manifestation of a larger trend in America: sacrificing the opportunities and livelihoods of lower- and middle-class people for the profit of banks, corporations and the wealthy elites. But there's only so much sacrifice people can handle before they're bled dry, and only so long a country can prosper on credit cards and loans that can't be reasonably repaid.

What is writ large in corporate bankruptcies, withering federal programs and industrial outsourcing is writ small in stories of impossible choices and shattered educational dreams. The real tragedy is not that America's young people can't afford their college education -- the tragedy is that they are told their entire lives that education is their birthright and a chance to social mobility, and then are forced to watch that birthright crumble under the weight of unbearable debt.
Myshele Goldberg is an aspiring Ph.D. in Edinburgh, Scotland.
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