“Basically broken.” This is how A. Wayne Johnson, the Trump administration official who resigned Oct. 24, described the student debt system he once ran. Johnson also called for student loan cancellation in a complete rift with his former boss Betsey DeVos who ridiculed Democrats’ plans to do just that.
Johnson is right when he says student loans as we know them are punitive and unsustainable. And it’s much deeper and more complex than even the $1.6 trillion in loans. Families aspiring to send their children to college begin to live up to its unattainable promises, archaic ideas, and arduous demands very early in their lives together and expect the pressure to last long after the kids have left home. foyer. I saw this clearly in the conversations I had with parents and middle class students for my book, In debt: how families make college work at all costs. Middle-class parents feel compelled to send their children to college, but the only way to give them that opportunity is to pay for it, and the price is high. This demand propels them into a bewildering maze of financial policies and programs run by government, financial companies and universities.. The path is so convoluted that I felt it needed a new name: the “Student Funding Complex”.
The student finance complex first attracts middle-class families by handing them the carrot of investing. By the time their child receives a Social Security number, federal and state governments and financial companies are banding together to tell families to save in accounts known as 529 plans that they say will grow in mutual fund offerings from the same companies. The existence of these plans delivers an early and harsh lesson in the financial complex of students: Responsible parents save for the cost of a college education; trying is how they can show they are doing the right thing. Never mind that no one can predict how much college will cost in eighteen years. Or that few are able to save money. According to a Office of Government Accountability Study, only a tiny fraction of American families – less than 5% – invest in 529 accounts. It shouldn’t be surprising that those who do are much wealthier than most, or that the other 95% end up feeling like a failure.
Even the few middle-class families who stretch and manage to save for college feel they haven’t done enough. This daunting feeling often erupts at the next step in the student finance complex: filing the application for free federal student aid. FAFSA, as every family applying for student financial aid calls it, is the gateway to financial support from the federal government, state governments, and schools. Crucially, the information families provide in the FAFSA generates the “expected family contribution,” the amount the federal government says a family can afford to pay for college.
A major problem is that the design of the FAFSA reflects an idea of family that is very outdated and unrealistic given the way we live now. The two-parent household with only dependent children has long been unavailable and undesirable to many Americans, but the FAFSA is designed to enforce that nuclear family fantasy. As the sociologist Andrew Cherlin has shown, the wealthiest families are the most likely to fit this profile. This means that simply completing the FAFSA forces most families to adjust their lives to the federal government’s assumptions. It can be a stressful mess.
Consider what happens when there is a divorce in a family. The form requires children whose parents have separated to choose only one primary parent, although this may not reflect how they live or define their most important relationships, and the very act of choosing a first parent may generate real family tensions and emotional pain. Some divorced couples must declare the income of a step-parent, even if they have children from another marriage and did not plan to contribute. In families where there has been actual estrangement (the kind that isn’t falsely fabricated by high-priced lawyers), students who live with a grandparent or aunt will not only have difficulty completing the form , but they will also get the clear message that there is something wrong with their families. The mismatch can be so extreme that the FAFSA website offers instructions to help students answer the question, “Who is my parent when I complete the FAFSA?”
This question alone shows that something is seriously wrong.
The FAFSA also fails to recognize many deep and heavy responsibilities. There is no accountability for obligations to support sick grandparents, help nephews or nieces with their studies, or help close friends in difficult times. As a result, many parents are shocked to learn of their expected family contribution and believe that their financial situation cannot support what the Department of Education says they can afford. And yet, what choice do they have?
The federal government then sends this distorted picture of family finances to colleges and universities, which use it to calculate a family’s tuition. More often than not, the aid programs they offer require students to go into debt with the Direct Loans Program, the main source of federal student loans. These loans were originally intended to be “good” debt that, like a mortgage, simply functioned as an investment. But the high cost of college today means that student loans are burdensome enough to limit the lives of the young adults they are meant to launch. According to federal reserve research, graduates with debt are less likely than their non-debt peers to buy a home. They too have less wealth, save less for retirement and are less satisfied with their jobs. Repay student loans jeopardizes the aspirations of the very middle class they are supposed to support.
In the end, the torturous student debt complex punishes too many of the people it’s supposed to help. University must be affordable and accessible if we are to open up opportunities for young adults, especially if we are to help them use their skills and interests to their best advantage and build a strong civil society.
When students have an easy way to pay for college, education accomplishes more than just imparting knowledge about cell biology or the Civil War. Our own history can show us the way forward. After World War II, the federal government introduced a program to pay veterans to attend college and vocational school – the GI Bill. Returning soldiers did not have to worry about repaying expensive loans. As policy scholar Suzanne Mettler has shown, the GIs who received it recognized the gift and, in return, continued to contribute to the country in their careers. But the program did more than just give GIs a leg up in the middle class; it also strengthened American democracy. Beneficiaries – GIs and their families – joined community organizations and became politically engaged at all levels. They responded to a free college education by invigorating the civic life of our country.
Education policies today should also help students and families reach their full potential as workers, people and citizens. This means first and foremost that college must be an affordable aspiration. Parents should not have to worry about future costs and all children should know that higher education can be an option for them. Once enrolled, students should be able to focus on the challenges of learning and growing into adulthood.
Not so long ago, our federal and state governments pledged to support and grow America’s middle class. How did they do it? With free or low-cost public colleges and universities. How are we going to get it back? By dismantling the student finance complex and reinvesting in each other by investing in higher education.
The best way to reinvent our country is to support the next generation. Today, they carry an unjustifiable debt. We owe them so much more.
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