I am one of the lucky ones to have graduated from university without any debt. I worked a few jobs throughout college, but the real reason I graduated debt-free was because of mom and dad’s bank. My parents started saving for my college education when I was born and were able to cover my tuition for those four undergraduate years.
My wife, on the other hand, wanted to do something to actually help people. She graduated with an average amount of federal loans and decided to become a speech therapist. She took out more loans to pay for a graduate program, after which she was able to land a job in the Bay Area.
After working for three years in one of the highest paying entry-level speech pathology positions in the country and living at home, she was finally able to repay all of her loans. Even with all of these immense benefits, we’re still struggling to figure out how we can carve out a permanent life here in the Bay Area.
These are the reasons why I wholeheartedly support student debt relief. President Biden’s recent actions are a small step in the right direction.
According to a study by the Federal Reserve Bank of New York, the average monthly student loan payment is $400. They also found that 50% of student borrowers owe more than $19,000 on their student loans.
In the Bay Area, according to ZipRecruiter, the average annual salary for a new college grad is around $50,000. This breaks down to a monthly income of $3,200 after tax. After loan repayments, that would translate to $2,800 to cover all other basic expenses, including housing, car payments, and groceries. With the exorbitant rent and cost of living we see here, it is difficult to sustain an existence even without the help of relatives or additional personal loans.
Often, this financial crisis forces individuals to forgo student loan repayments or pay the bare minimum. During these periods, interest continues to accrue, significantly increasing the total amount owed on a monthly basis. When a person is able to get a raise or find some financial wiggle room, they find that their monthly payments have increased as well.
This still puts college graduates ahead of the average high school graduate. High school graduates without a college degree earn an average annual salary of about $44,000 in the Bay Area, with little room for upward mobility.
These days, life without a college degree leaves very little room for growth or breaking out of the poverty trap. Conversely, a college degree means there’s no real way for you to have true financial independence, let alone a way to accumulate savings to any meaningful level.
If there is any hope of getting out of debt, you either have to find a well-paying job quickly or rely on family to support you.
I am in favor of student debt relief because I would like to live in a society where people can lead better lives without fear of living in debt forever.
Ideally, we would start by encouraging understaffed positions in teaching, medical care, social work and all the other areas that we have encouraged and labeled “essential” during the pandemic. We should expand the existing debt forgiveness framework by canceling all loans for people who choose to pursue a career in essential work that keeps our society running.
If an individual shows passion, skills and a desire to help their wider community, we should do whatever we can to help them achieve their dreams.
Reducing the student loan burden through loan forgiveness is a good first step. More needs to be done to significantly expand educational opportunities for all. If you’re striving to excel academically, debt shouldn’t be the anchor that holds you back for much of your life. In a society that claims to reward hard work, an education shouldn’t be stuck on your birthplace’s lottery ticket.
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