Two Brief Notes on Student Debt

The New York Times reports today:

Student loan debt outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year as more students go to college and a growing share borrow money to do so.

While many economists say student debt should be seen in a more favorable light, the rising loan bills nevertheless mean that many graduates will be paying them for a longer time.

“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” said Mark Kantrowitz, the publisher of FinAid.org and Fastweb.com, who has compiled the estimates of student debt, including federal and private loans.

Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993. Last year, graduates who took out loans left college with an average of $24,000 in debt. Default rates are rising, especially among those who attended for-profit colleges.

The mountain of debt is likely to grow more quickly with the coming round of budget-slashing. Pell grants for low-income students are expected to be cut and tuition at public universities will probably increase as states with pinched budgets cut back on the money they give to colleges.

From Annie McClanahan's article "Coming Due: Accounting for Debt, Counting on Crisis" in Against the Day:

[W]hy do fee increases feel "intangible"? The reason is expressed in the shrugging student's description of buying on credit: it is real, but "not real yet." Debt is a promise of future realization, not a present fact. As historian J. G. A. Pocock famously observed, the very notion of the "historical future" -- a future available to human action yet driven by social forces larger than the individual agent -- is the effect of the emergence of large-scale credit mechanisms. For the student buying education on credit, the future of debt repayment is at once deferred and inexorable: 2014, when today's first-year students will be asked to start paying back their loans, may seem unimaginable distant to some but nothing will prevent its arrival. Many students are already becoming aware of the cruel certainty of debt repayment. In the summer of 2009, two of my students had to miss classes to help parents who were being evicted from their homes; they did so in the besieged Central Valley of a state whose own drastic debt forced it to give public employees IOUs rather than paychecks. The student's shrug is thus a gesture expressing both repayment's postponement and debt's inevitability, and this experience of an ineluctable but distant day of future settlement sustains a feeling of resignation far colder than what is often dismissed as generational apathy. Creating a sense of critical urgency among students around the issue of fee increases requires that we bring the indebted future into the present, that we make the cost of an education bought on layaway visible -- and transformable -- here and now.