How Student Loan Forgiveness Has All Bad Answers

-Pastor Melissa Fain-

As the restart of Student Loans looms, everyone waits to see what Biden will do. It is my hope, by the time I share everything I want to share, you see how impossible all this is. 

I don’t do this to dishearten you in any way, but as a means to show grace.

The recent history

At the end of 1965 The Higher Education Act was signed into law with the understanding that it would give women and minorities funding to go to post-secondary and higher level schooling. 

The Higher Education Act was amended multiple times throughout the years, to include funding for historically Black Colleges (1986), origination of the FAFSA forms to keep those with drug charges from getting loans [you know, the war on drugs and all] (1998), Income-Based Repayment and Public Service Loan Forgiveness was introduced (2007).

Another story, but it’s about our economy:

After World War II, there was an economic boom. Some of this was our desire to be relational. It was the explosion of community organizations. Scouts, Shriners, Churches, and the like all saw record numbers. These adults were called “The Greatest Generation.” They would give birth to the “Boomers,” named such because there was also a baby boom following the end of World War II. (I want to add as an aside, directly after the Boomers, Gen X were born. They get left out of these generational tales because their parents were the Silent Generation. The Silent Generation was born between Boomers and The Greatest Generation, they had to work hard, and their kids were literally forgotten at home as they were in history. Love y’all.) 

The Boomers were taught one-sided lessons. Children’s stories were sanitized of horror and death. See, their parents were witnesses to the absolute worst of humanity. They did not want their children to live in that kind of world. The work ethic was drilled into the Boomers. Work hard, and if you work hard enough, what you want will happen. Well, that’s easy to say, when the economy is good. When economic waters rise, all rise with it. 

When Boomers had their own kids, they went one step further, and created no-lose situations. Everyone's a winner. It’s understandable, because the Greatest Generation sent a mixed message. On one hand, they hid the darkest parts of the world from their kids. On the other hand, they created the competitive spirit, where Boomers were forced to fight for the best of the best. When you don’t see the horror of death, your standard for what is the worst naturally changes. The worst became one another. So, taking a line from their parents, Boomers sanitized the games.

Because everyone was a winner, they still had the strong work ethic that existed in a strong economy. The Millennials were told to do the work, and get the reward. Everyone won, so there was no field where winning wasn’t an option if only they worked hard enough. Of course there were losers, but that’s only because they didn’t give it their all. If they had tried harder, they would have made it.

Millennials flocked to college with the promise of good paying jobs on the other side of the diploma.

2008

Here is where everyone is getting this wrong: Underwater Basket Weaving. That was the degree that was used to highlight every pointless degree, and weaponized to point out useless student loans. At the very same time, there were shows highlighting the obsessiveness of parents grooming their children for fame and fortune, as if those two things were naturally related. With shows like American Idol coming into existence, the big fish in a little pond ceased to exist. Every person could apply for any job. While that sounds amazing for potential jobs, it wasn’t. It made the job market even more competitive. You couldn’t just be like Howard Finster, a middle of nowhere minister who became a sensation with his folk art. You had to be flawless in everything. People were spending big money on artistic degrees, because they were competing with big names. 

So, over half of all Millennials either had a degree or were in the process of getting one when the stock market crashed and the housing bubble popped. The rest were still being told they can be the best of the best, if they only tried hard enough. 

And, not all those degrees were, as some would put it, “useless” degrees. It’s just that there were no useful jobs after 2008.

Basically, in 2008, retirements just went away. All these Boomers wanted to do was get to that retirement. When they didn’t have it anymore, they went back to work. They were already more qualified than their children, so their kids, with their very expensive degrees, found themselves as retail workers and servers living in their parents' basement. 

This was mocked. Relentlessly. Boomers were pitted against Millennials, and it stuck. Kids started hating their parents because their parents were holding them to their childhood situation like the Millennials could do anything about it.

Millennials made it work. They started paying back their loans, and working low income jobs. There was no breathing room. They were living paycheck to paycheck, because they had no other choice.

2020

Covid led to the Student Loans being paused, and it has temporarily changed a Millennial’s life. This has been great for a generation that hasn’t seemed to catch any breaks at all, but there are choices coming that will change the entire United States for decades to come.

Canceling the debt:

I believe, part of the reason the loans haven’t been restarted is this is an election year. You start the loans back up in September, and it becomes the focus for the November election. (Of course, I can also see why a President, with a tanking economy, would consider putting something like that at the forefront of the Election year.)

That being said, let’s say we cancel all that debt. It’s a clean slate. 
With everything else in play, there is no way this won’t happen again. Businesses need to start offering local education opportunities. Trade schools need to be a better option for more people. The allure of fame needs to be crushed, put in a dumpster and set on fire. Universities will still offer an education to the people willing to pay for them, but if there are enough affordable options, they’ll necessarily need to lower costs to compete.

Right now, kids must get these huge loans in order to seek an education. I know my eldest child wants to go to school and get a music education degree. He’s seriously considering not doing that, because there are no inexpensive options. Any forgiveness for my debt won’t save him when he needs to make similar choices.

Let’s say we don’t cancel all that debt. Then what?

The Federal reserve is attempting to stop inflation without considering these student loans. I wouldn’t be surprised if the Fed is quietly realizing that their aggressive interest rate hikes will hit hard after the restart to all these loans. Perhaps too hard, which is why there’s this vacuum of silence over the issue.

Now, you might be thinking, “Not my debt, not my problem.” That is such an American answer, I can’t fault you for thinking it. Only, it is our collective problem. One of the major factors to the economic boom following the Great Shutter (coined that term myself, but it’s too good to have me be the only one who used it) was all these families finally having breathing room to save and spend. They put their kids in programs, purchased items from our independent businesses, and just had a chance to finally breathe. Some changed careers, no longer feeling anchored to a degree they couldn’t use. 

Let’s put it another way. 
When I was a kid, I wanted to pair up with someone about the same size as I was, so when I got to the playground I had someone with whom I could play on the seesaw. Finding the perfect person was vital. If the person was too light, I would be sitting on the ground, doing all the work. If the person was too heavy, I’d be at the mercy of the other person, stuck in the air. A person, the same size, is a fun experience of back and forth. 

When it comes to the economy, the Federal Reserve doesn't want a seesaw. They want an equilibrium. To use another word for seesaw, they teeter totter between inflating and deflating the dollar. If the dollar deflates too much we end up in a recession, or worse a depression. On the other hand, if the dollar inflates too much we end up in hyper-inflation and the worst case scenario is something along the lines of the Weimar Republic. 

Now imagine the U.S. Economy is a seesaw. We were tottering too much into inflation territory. The Fed had to act immediately. They needed the economy to slow their spending, to bring equilibrium back to the economy. Now, their work is finally working, but they found this equilibrium without student loan debt being in play. 

So going back to my playground story. It would be like my friend and I balancing in the middle and a kid, really any kid, jumps on one side. It throws everything off, and suddenly I’m crying and on the ground because the seesaw became a simple catapult, and I was ready for that kind of jump.

See the problem?

It’s no longer about what’s fair or not fair. At this point, restarting loans could have a catastrophic effect on the economy that would hurt far more than the people who took them out.

This is one piece, when there are so many other pieces at play right now. This might seem like a pretty big piece to the American economic story , but the other pieces are just as big, if not bigger.

I mention this here, because I just want us to realize this is our story. Our repercussions. We can’t just cut ourselves away from this. We are doing this together, whether we want to or not. I believe, God wants us to work together. God wants us to find the answers together. God wants us to see our neighbor.