Throwing NYC a Lifeline
Each month, the average student loan holder experience is the same: each payment is made with a mix of anger and a certain sense of hopelessness at the massive amounts still owed. We as a country have done a hell of a job digging ourselves into debtor purgatory. $1.3 trillion in national student loan debt hell, to be exact. About a billion dollars of that are from defaulted loans. Loans from those that are drowning in their finances.
And even after earning those degrees, how many of us know someone that is working in a job completely unrelated to their field from failed job search after failed job search? That could be many of us reading this right now.
So you make your monthly payments. You get pissed off. You watch your money leave your account. And you wonder to yourself "was going to college even really worth it?!"
As it turns out, there's a study for that. Current Issues in Economics and Finance in 2014 found that even though students are paying more than ever for college, average wages were 15% higher for Associates and Bachelors degree holders than for those with a high school diploma. That while wages decreased across the board from 2001 - 2013 (it will never not hurt my brain to read that), high school graduates experienced more drastic wage dips. And this study juxtaposes full time employees only, with that gap almost certainly to be larger if taking into consideration part time work; as the job pool shrinks and employers' leverage for cheaper compensation goes up.
Ok, so, back to square one. You're screwed if you go to college and collect mounds of debt. And you're even more screwed if you don't. Great. What gives!?
Profiteers off such a backwards system, other than the numerous privately contracted companies hired by the federal government to handle the student loan industry, is the federal government themselves. They alone have collected $66 billion dollars off interest from loans they issued out. And the new Secretary of Education Betsy Devos, put in place in part to address the student loan issue, stands to profit off the current broken system: she owns a management firm, RDV Corp., that has financial ties to a debt collection agency hired by the Education Department. Because of course she does.
Even when the financial crisis hit in 2008 and banks ceased lending for many for a while there, student loans were still being given out at risky levels. Anything too easy to get should be questioned. Always. In every aspect of life.
Closer to home, it continues to get more and more expensive to live in NYC. The rent's go up. The property taxes go up. The cost of living is constantly going up. The tuition's go up. But the wages, on average, continue to stagnate. New York state alone saw their total student loan debt double in the last ten years and the median NY student debt holder amount higher than that of the national average. With more debt there's less money to put into the local economy. With more debt there's less opportunities for frivolous purchases. Less money for a home, an apartment, a car. For every new condo complex being built, every middle class or poorer family sees less of an opportunity in NYC to make a living. That's why it behooved New York Governor Andrew Cuomo to announce what he did on April 7, 2017.
"With a college education now a necessity to succeed in today's economy, I am proud to sign this first-in-the-nation legislation that will make college accessible", said Governor Cuomo. This will be available to any family that makes less than $100,000 a year. In two years, the threshold will stretch to any family making less than $125,000 a year. The legislation is for all CUNY and SUNY schools for up to four year programs.
With this bill, one can hope that no longer will someone's decision to pursue an undergrad degree be squashed purely by a fear of living in perpetual student loan debt. This bill should also open up opportunities for those interested in pursuing graduate level degrees, as they may be afforded the opportunity to accrue a savings that will now not be needed to be put towards once hampering undergrad loans.
Millennial's have huge spending power and for years have been crippled by these student loan debts. Starting this fall tuition under the threshold will be covered, leaving the opportunity for big cash flows into New York's economy. And that benefits all. The cynic in me sees this as Governor Cuomo's chance to put forth a legacy he can refer back to while pursuing a more prestigious political seat. But in a political climate where there's misery and gloom at every turn, I'll take a win any way I can.