See the Additional Resources for Topics for Critical Thinking and Writing and reading comprehension quizzes for this chapter.

ROBERT APPLEBAUM

Congressman Hansen Clarke (D-MI) in 2012 introduced (with seventeen cosponsors) the Student Loan Forgiveness Act of 2012 (HR 4170). This proposal included the 10/10 Loan Repayment Plan, which (a) would for ten years automatically withdraw 10 percent of the debtor’s income and then (b) would forgive loan debt up to $45,000. Robert Applebaum (b. 1952), a graduate of Fordham University School of Law, initiated a petition — now signed by well over a million people — supporting Congressman Clarke’s proposal. The petition claimed that forgiving debt would stimulate the economy by in effect giving the former students more money to spend. In the petition Applebaum wrote:

Student loan debt has become the latest financial crisis in America and, if we do absolutely nothing, the entire economy will eventually come crashing down again, just as it did when the housing bubble popped. . . . [T]hose buried under the weight of their student loan debt are not buying homes or cars, not starting businesses or families, and they’re not investing, inventing, innovating, or otherwise engaged in any of the economically stimulative activities that we need all Americans to be engaged in if we’re ever to dig ourselves out of the giant hole created by the greed of those at the very top.

We reprint here a short essay Applebaum later published, in 2012, in the Hill, a Washington, D.C., publication.

Debate on Student Loan Debt Doesn’t Go Far Enough

As Congress debates the extremely narrow issue of whether to extend the current 3.4 percent interest rate on Federal Student Loans, or to let that rate expire and, thus, double to its previous level of 6.8 percent, both sides of the aisle are missing an opportunity to do something unique, decisive, and bold: adopt legislation that forgives excessive student loan debt after a reasonable repayment period.

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Representative Hansen Clarke (D-MI) introduced an unprecedented piece of legislation in March — HR 4170, The Student Loan Forgiveness Act of 2012, in response to over 660,000 people who signed a petition I started in favor of student loan forgiveness. Yet, despite the public outcry, only one member initially stepped up to put his name and reputation on the line in order to draw attention to the ever-growing crisis of student loan debt. Rep. Clarke has taken on the role of Champion for the educated poor — the 36 million Americans who are drowning under the weight of their student loan debts. A new petition I started in favor of HR 4170 currently has over 939,000 signatures.

The Student Loan Forgiveness Act of 2012 is not a free ride, nor is it a bailout. It’s a recognition that millions of Americans have grossly overpaid for their educations, due in part to governmental interference in the marketplace. With the availability of so much seemingly “free money” available to anyone with a pulse who wants to take out a student loan, colleges and universities have had no incentive to keep costs down — and they haven’t. The outrageous costs of obtaining a college education or beyond today have very little to do with the inherent value of the degrees sought; rather, it has much more to do with brand new stadiums and six-figure administrative salaries. After all, if the degrees obtained today were worth the increased cost to obtain them, compared with thirty to forty years ago, then shouldn’t those degrees also yield greater salaries upon graduation?

Tuition rates continue to soar and students are required to go further and further into debt each year, merely to obtain an education. Every other country in the industrialized world has figured out how to pay for higher education for its citizens, but here in America, we continue to treat education as a commodity that benefits only the individual obtaining the education, rather than what it truly is: a public good and an investment in our collective future as a country.

5 Education should be a right, not a commodity reserved only for the rich or those willing to hock their futures for the chance (not a guarantee) to get a job. Gone are the days when tuition rates had any kind of rational connection to the salaries one could expect upon graduating. With each passing year, students are left with no choice but to borrow more and more through both Federal and private student loans to finance their educations, as if the degrees obtained today are worth any more than they were a generation or two ago. In fact, they’re worth far, far less than in years past, precisely because of the high cost of tuition combined with the decimated job market where middle-class wages have gone down, not up, over the last decade.

We’ve long ago passed the point where we have become what my friend, Aaron Calafato, writer, director, and star of the play For Profit, would call a “borrow to work” society. Far worse than “pay to play,” borrow to work is a modern form of indentured servitude, where millions of Americans are told since birth that in order to get ahead, they must obtain a higher education.

What they aren’t being told, however, is that in order to obtain that education, students must necessarily mortgage their futures and spend the rest of their lives paying back the loans that gave them the “privilege” of working at jobs they hate for salaries that simply do not allow them to make ends meet.

How do we ever expect the housing market to improve when the very people we rely upon to purchase homes — college grads and professionals — are graduating with mortgage-sized debts that they can neither live in, nor use as intended in today’s job market?

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Are we content to live in a society where only the privileged few are able to obtain an education without sacrificing their future? Do we really want to price the middle and working classes out of public service? And who’s going to be buying cars, starting businesses, and making investments in our future if not the middle class? We’re not yet an oligarchy, but we’re fast on our way toward becoming one if we knowingly fail to address this ever-growing crisis, before it’s too late.

10 Unfortunately, the $1 trillion in student loan debt outstanding in America is not a ceiling, merely a disturbing milestone along the national path to poverty. If Congress does nothing, it’ll only get worse.