Published January 19th, 2021 at 6:00 AM
When Michael Wolfe was in high school, his economics teacher told him to follow his dreams and go to college to get a film production degree.
Wolfe still regards this as some of the worst advice he’s ever received.
At age 25, Wolfe is in $92,000 of student debt after just three years at Chapman University in Orange, California. His student loans have become a ball and chain.
“I feel trapped. Completely trapped. And I’m one of the privileged ones,” he said.
The American Dream seems to promise, in part, that opportunities will rain down from the sky for anyone who works hard and earns a college degree. However, more than a few of America’s 45 million student loan borrowers might disagree.
Collectively, those 45 million borrowers owe about $1.6 trillion in student loan debt. The cost of higher education has been rising rapidly for decades, and wages are simply not keeping up. According to an article in Forbes, the price of college is increasing almost eight times faster than wages.
This, in a nutshell, is America’s student debt crisis.
Missouri is ranked 20th in the nation for the average student loan debt per borrower ($33,700). Kansas, ranked 35th, has an average of $31,300 in student loan debt per borrower.
Wolfe said he is constantly one accident away from ruin because of his student loan payments that come to about $750 per month. He was barely breaking even before COVID-19, and when the pandemic hit he lost his retail job. At any point, a car accident or medical emergency could push him to bankruptcy.
His federal loans are now on a pandemic-related reduced payment plan, meaning that he only has to pay $0-67 per month. While the lowered payment helps keep him financially afloat, that means that he is essentially only paying off the interest on his federal loans each month.
In other words, those loans are not getting paid off any time soon.
This common case of someone teetering on the edge of collapse due to crushing student loan debt is exactly why many, such as U.S. Sen. Elizabeth Warren, are calling on President-elect Joe Biden to cancel student loan debt.
Biden has promised to waive $10,000 of student debt, but some still call for the forgiveness of up to $50,000, or even the entirety, of student loan debt. It is rumored that we could see an executive action in his first 100 days in office
So, what would happen if $10,000 of debt vanished into thin air tomorrow?
For borrowers like Wolfe, very little. But for people like social worker Aleesa Lennon, that might make a difference.
For all intents and purposes, Lennon did everything right. She went to Johnson County Community College for her general education classes and worked several nights a week to stay out of debt. But when she transferred to the University of Kansas, getting into debt was practically unavoidable.
“We blame people who are in poverty for being there, and if they just budgeted correctly, then they would be fine,” Lennon said. “But that’s not… true.”
At age 30, Lennon is about $20,000 in student loan debt. She has worked almost full time since the age of 15, and much of her time at KU was spent going straight from studying to waitressing shifts. From a young age, she has been making her own car payments and paying her own rent. Despite the discipline and budgeting, it was a fight to stay afloat.
Today, her take home pay as a social worker with seven years of experience is close to what she made waiting tables.
Even though she claims an incredibly high level of job fulfillment, she has to work a second job to pay the bills.
“When the next bad thing happens, I won’t be able to afford it,” she said.
So then, how do we get out of this mess? Cancelling student debt will provide immense economic relief now, but the system that puts people in debt will remain unchanged.
One small college in Mobile, Alabama, might have part of the solution.
Dr. Joseph Lee, president of Spring Hill College in Mobile, Alabama, recently announced a $20,000 decrease in tuition. Not only that, but the college is offering more class options and bolstering the student experience.
To most people, including the school’s board of directors, when Lee first proposed the tuition cuts it seemed impossible. But according to Lee, this will actually make the school more money in the long run.
In theory, Spring Hill College will essentially be offering its school at market price. The hope is that the cheaper price and better experience will increase the student population, and in time the changes will pay for themselves.
“We want to open the funnel,” Lee said. “We think we’ll become more diverse. We’ll be able to serve more of the Alabama population, which is part of our mission.”
While Spring Hill’s analysis predicts that this will work for them and their student population of about 1,500, could this work for larger schools such as the University of Missouri or the University of Kansas? Lee said yes, and it might even be necessary.
“Student debt, it’s in crisis mode,” he said.
Climbing tuition fees and stagnant wages are pieces of the puzzle, but maybe there’s another factor to consider — that college isn’t for everyone.
While attending Blue Valley North High School, Wolfe unquestioningly spent four years padding his resume to become the ideal college applicant.
“I did everything right,” he said.
He considered his extra curricular activities, leadership positions and after school jobs, but there was one thing he didn’t consider – not going to college at all.
The culture of both his and Lennon’s schools were the same in this respect. Going to college was assumed of all students.
While not having a college degree can put you at a serious disadvantage in some job markets, there are others where experience is more important.
While Wolfe was attending Chapman University, he was told repeatedly that he didn’t need a degree to get into the film industry. While he doesn’t regret his time at school, he now knows that he has slim to no chance of owning a home or getting a graduate degree because of college.
The causes of the student debt crisis are numerous, and the issue continues to worsen as the pandemic drags on. Student loan forbearance is set to end on Jan. 31, and 45 million borrowers are waiting to see if any relief is on the horizon.
Catherine Hoffman covers community affairs and culture for Kansas City PBS in cooperation with Report for America.