College students all over the U.S. are graduating with more and more student debt. Every American should be concerned about this. In colonial times, a college education was a privilege of the rich. Few people without wealthy parents had any chance or hope of ever going to college. If we go back to that educational standard, we are in serious trouble as a nation. An industrialized society that does not promote and support higher education is doomed to poverty and becoming a third-rate and Third World nation.
The war on college education has been going on for a long time. In 2007, Congress changed the federal bankruptcy law to exclude student loans from the debts that are discharged in bankruptcy. As a result, if you run up $100,000 in student debt and declare bankruptcy, you will leave the bankruptcy court still owing the full $100,000. But if you run up $100,000 in credit card debt traveling around the world and declare bankruptcy, that debt will be wiped out completely.
In December, the House of Representatives passed a tax bill that made college tuition waivers taxable income. Senate leaders removed this provision from the final draft of the tax law only after strong national public opposition. Had this provision remained in the final law, tens of thousands of graduate students would have been forced to drop out of college because they would not be able to pay this new tax. The problem is that you can’t pay income tax if you have no income, and a discount on tuition is not income. The House bill would have eliminated the deduction for interest on student loans as well, but this too was eliminated in the final law because of public outcry.
All over the country, state legislatures are passing laws designed to make college education less affordable. Did you know that in a lot of states, if you don’t pay your student loans on time, you can lose your job? For example, if you are a physical therapist and you get behind in your student loan payments, your license to work can be revoked in 20 states. And in South Dakota, Iowa and Oklahoma, if you don’t make your student loan payments on time, the state can take away your driver’s license. In other words, if you went to college and are not making your student loan payments on time, the state can take away your ability to work in your profession. Then how do you repay your student loans?
South Dakota has perhaps the most punitive student loan default laws. If you default on a student loan in South Dakota, the state can take away your driver’s license. Taking away a person’s driver’s license in a largely rural state such as South Dakota for failing to repay a student loan on time seems just plain mean-spirited to me. Also, in South Dakota, if you get behind in repaying your student loans, you can lose your license to work as a registered nurse, a physical therapist or a speech pathologist, and if you are employed as a public school teacher in South Dakota, you can be immediately fired. Plus, at last count, about 1,500 people living in South Dakota were denied hunting and fishing licenses for failing to repay student loans on time. So, if you are behind in your student loan payments in South Dakota and you work in a licensed occupation, not only are you barred from working in your profession, but in addition, you can’t legally hunt or fish for your dinner. You can, however, legally eat vegetables that you grow in your backyard. Sounds ridiculous, doesn’t it?
Here in Berkeley, the main driver of college student debt is the cost of housing. A two-bedroom apartment in a new building near campus costs $4,000 to $5,000 a month. Everyone in Berkeley city government is aware of this, but no one seems to be concerned about it. Quite the opposite. The mayor and Berkeley city council are constantly passing new laws and regulations designed to raise, not lower, the cost of building new apartments near campus. For example, a permit to build a new apartment house in Berkeley near campus now costs between $100,000 and $200,000 per apartment — and the council is planning to raise the price of permits next year. Now, who do you suppose ultimately pays for these astronomically expensive building permits? It’s just who you think it is! It’s the tenants who live in these buildings.
The lack of concern by politicians on the right — as well as the left — over the rising cost of college education in the United States and rising student debt should be of great concern to every American, but it doesn’t seem like it is.
Mark Tarses is a resident of the city of Berkeley.