Debt relief a start

While President Biden’s recent decision to forgive up to $20,000 in individual student debt is popular with young people, it’s come under criticism from some quarters as unfair to those who paid their way through college or avoided debt by never going at all.
Those arguments fail to recognize how times have changed, both in terms of the cost of pursuing higher education as well as the cost of failing to do so.
Back in the 1960s and 70s, when many baby boomers were headed off to college, tuition at a public university was incredibly cheap. An entire year’s tuition and fees at the University of Minnesota back in the late 1970s was under $1,000, equivalent to about $3,500 today once adjusted for inflation. Yet that same tuition this year is over $16,000. For many families, that’s insurmountable without financial aid.
Back in the 1970s, room and board was the biggest expense for a student at the U of M. Those who could live at home with mom and dad could save even those costs, which meant it was easy for a college student to work their way through school, because they barely needed to work at all to afford tuition.
So why has tuition increased so rapidly? There’s no one reason, but one of the biggest is the fundamental turn our political system took beginning in the 1980s. It was the so-called Reagan Revolution and it put the focus by Republicans, and some Democrats as well, on income tax cuts. At the time, the American tax system was far more progressive than it is today and it taxed both corporations and high income earners at significantly higher rates. Corporations, in particular, paid a much heftier tax bill than today. Back in 1952, corporations paid roughly six percent of the gross domestic product in federal corporate income taxes. Today, corporations pay about one percent of GDP, despite record profits.
We’ve seen similar trends at the state level, including here in Minnesota. As we’ve taxed corporations and the wealthy less, states contributed comparatively less toward the operation of public colleges and universities. Instead of taxing those with means to help make higher education affordable for everyone, our political system put the burden on students and their families to make up the difference through financial aid. And much of the roughly $1.6 trillion that students now owe in the U.S. is owed to some of the very same corporations and wealthy investors who reaped the rewards of all those tax cuts over the past few decades. It’s a sweet deal for those with means. America used to tax them to fund things like universities. Now, we borrow from them and pay hefty interest to boot.
Which is why anyone over age 55 can’t really criticize a modest debt relief initiative on fairness. The baby boomer generation grew up in an entirely different America, where progressive taxation, among other things, provided them with affordable higher education. That hasn’t been the reality for students for more than 25 years now. For the vast majority, attending college or a university means going into debt, and often spending decades with a financial burden that students of previous generations never had to shoulder.
Fairness? Not exactly.
This unprecedented burden comes at a time when higher education is more critical for young people than ever. Back when baby boomers were joining the workforce, there were many more opportunities, particularly in manufacturing, for workers with just a high school degree. Those jobs have disappeared by the millions since then, leaving most young people with the choice of pursuing higher education or relegating themselves to low paid service work the rest of their lives. While there are opportunities in the trades, even those jobs often require some level of post-secondary education. Vocational and technical schools also can leave students with significant amounts of debt.
That’s why Biden’s modest proposal really doesn’t go far enough. Throughout American history, the funding of public schools has expanded along with the complexity of society. A century ago, many states still charged tuition for students to attend public high school, if they had high schools at all. These days, that would seem unconscionable, because we recognize that the world has changed.
That change accelerates every year, which is why public post-secondary education should be tuition-free, or nearly so, at least through a two-year degree, whether it’s in the liberal arts or a trade. No one should be forced to settle for lesser opportunity because they can’t afford to improve themselves. When we create opportunity through higher education, it’s not an expense, it’s an investment— one that makes this country stronger. We’re dependent on that next generation to become the innovators, the thought-leaders, and the trained workers we’ll need to stay competitive in the future. Why would we sell them short?