Occupy and Student Loans

This Occupy movement is really all about student loans. According to a piece by Libby Nelson at Inside Higher Ed many, many of the protestors carried signs about their high student loans and limited job prospects. “Graduated college: May 2010. Debt: $35,000. Jobs in US: None” is a common theme. As Nelson writes:

The protests… came at a moment when several trends were already converging, observers say: rising college costs, an increasing emphasis on promoting higher education for low-income students, more borrowing and decreasing numbers of jobs for new graduates.

But the implications of this protest movement are unclear. Nelson again:

But while the roots of the outcry over loans may be clear, the long-term repercussions are not. The movement’s focus could be a political flash in the pan, dissipating once the world’s attention turns elsewhere. Or the growing public awareness of student debt could lead to better consumer protections, especially on private loans, or to more responsible borrowing habits.

A more structural approach to the problem, however, would be to dramatically limit the amount of loans students take out to go to college. Until the 1990s it was very rare to assume debt to pay for college at all.

As President Obama pushes more Americans to graduate from college in order to more effectively compete with other developed nations, it’s worth considering how other nations address college debt.

For the most part, they don’t. There is no such thing as student loans. In most other developed countries higher education, like health care, is simply a public good and funded by the state. That doesn’t work out perfectly, but it works out.

Discussing things like “consumer protections” and “income-based repayment” might be progressive, and perhaps even helpful, but it doesn’t address the real problem.

The real trouble here is that forcing students to go into debt to go to college is a great way to ensure that people don’t finish college. The college dropout rate is now about 42 percent.That means the system doesn’t work. It’s student loans that ensure this doesn’t work.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer