Amid America’s colossal student debt problem, an Ivy League school is providing an example of how institutions can help.
Beginning next school year, Brown University will eliminate all student loans in its undergraduate financial aid packages, replacing them with scholarships. Following a $30 million fundraising effort launched in September, Brown administrators announced this week that 2,087 donors contributed toward the goal, and that the school—located in Providence, Rhode Island—plans to raise $90 million more to sustain the scholarship giving.
One of every seven adults in Washington owes money they borrowed to pay for college or career training, and taken all together, those borrowers owe more than $24 billion in student loans.
Late last year, congressional Republicans passed a $1.5 trillion tax cut, which delivered the lion’s share of its benefits to the wealthy and corporations. The GOP did not justify this policy on the grounds that all corporate shareholders and trust-fund hipsters deserved to have their wealth increased. Rather, the party argued that, however one felt about making the rich richer, the tax cuts would ultimately benefit all Americans by increasing economic growth and lowering unemployment.
Less than a week after President Donald Trump gave his State of the Union address touting the strength of the American economy under his presidency, the stock market saw one of its worst trading days in recent history, with stocks falling by about 1,175 points.
In the US, college is more expensive than ever before.
Moreso than any other generation, millennials are graduating with crippling student debt that may take their entire lives to pay off. Today, the average American student leaves college with $37,172 in loans, a $20,000 hike from 13 years ago.
After millennials earn their diplomas, they often move to cities that promise ample job opportunities, like New York, San Francisco, Boston, and Seattle.
The American student loan crisis is often seen as a problem of profligacy and predation. Wasteful colleges raise tuition every year, we are told, even as middle-class wages stagnate and unscrupulous for-profit colleges bilk the unwary. The result is mounting unmanageable debt.
There is much truth in this diagnosis. But it does not explain the plight of Liz Kelley, a Missouri high school teacher and mother of four who made a series of unremarkable decisions about college and borrowing. She now owes the federal government $410,000, and counting.
When President Trump rolled out his recent budget proposal, it made some cuts that were always going to cause controversy. For one thing, his plan would slash subsidized student loan repayment plans, and let the government crack down on missed payments. To left-wing politicians who think the state should hand out more subsidies, this might as well have been Armageddon.
Every month, approximately 40 million Americans make payments to a corporation they know almost nothing about.
There are just four major companies contracted by the federal government to process the nation’s student loan checks and after the just-completed merger of two of these firms — Nelnet Inc. NNI, -0.72% and Great Lakes Educational Loan Services Inc. — one company will handle more than 40% of all payments.
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“What I would like to do... once I take care of all my kids' student loans, is buy a red 1965 Mustang and fully restore it.”
– Mike Quigley
"If we don't change direction soon, we'll end up where we're going."
– Irwin "Professor" Corey
"Bankruptcy laws allow companies to smoothly reorganize, but not college graduates burdened by student loans."
– Robert Reich
"Nothing in life is to be feared. It is only to be understood."
– Marie Curie
"There is scarcely anything that drags a person down like debt."
– P. T. Barnum
“This would be a much better world if more married couples were as deeply in love as they are in debt.”
