When I spoke to a Georgia State University journalism class earlier this year, I invited students to submit guest columns to the AJC Get Schooled blog.
Here is a piece from one of those students. Mika A. Billins is studying mass Communications at GSU.
In this guest column, Billins discusses the student loan crisis and a proposal in Congress to create automatic payroll deductions for student loan repayment.
By Mika A. Billins
Sen. Lamar Alexander, R-Tenn., chairman of the Senate Health, Education, Labor and Pensions Committee, proposed that student loan borrowers should have their monthly payments automatically deducted from their paychecks. If this proposal becomes law, the current federal student loan repayment options would be decreased from nine to only two.
Alexander’s proposal sounds more like wage garnishment than a helpful solution to student loan debt, especially for recent graduates and those with low-paying jobs.
Out of the 40 million U.S. borrowers who owe $1.5 trillion in student loan debt, 16 million of them are under the age of 30 and collectively have a student loan balance of $383.8 billion.
The consequences of student loan debt are extensive, from the inability to save for retirement to the delay of marriage and home ownership.
But for recent graduates, an automatic student loan repayment law would lead to even greater financial stress and affect borrowers’ ability to pay rent and buy groceries. Forget the inability to save for retirement.
“If I look at my current financial situation, even if I tried to buy a house without student loans coming straight out of my paycheck, it’s already slim,” said Kaila Hairston, a 2017 Georgia State University graduate.
Many graduates, like Hairston, are already financially challenged with living by themselves or with a roommate. If student loan repayments are deducted from paychecks, the likelihood of them being able to afford an apartment at all would significantly decrease.
At an American Enterprise Institute event, Sen. Alexander stated that his goal is to restructure the student loan system and protect borrowers.
"It makes sure if there were no money earned, there would be no money owed, and that would not reflect negatively on a borrower's credit," said Alexander.
Sure, automatic deductions from paychecks could lower borrowers’ risk of student loan default and prevent the negative consequences of late repayment. However, most college graduates are not immediately concerned with their credit score as much as they are concerned with surviving.
This Republican-backed proposal seems to mainly help borrowers who have no problem repaying their student loan debt in the first place. What Sen. Alexander and his supporters are failing to address is the fact that student loan debt has increased because the cost of receiving a higher education has increased.
According to a Student Loan Hero Report, the average annual income has grown by 67 percent since the 1970s and 1980s, but the average cost of an undergraduate degree from a public or private college has risen by 171 percent.
Excluding the fact that the cost of living across the U.S. has also increased, one of the main causes of outstanding student debt is the fact that wages are not increasing as fast as the cost of college attendance.
And we can't ignore the fact that after adjusting for inflation, government funding for public colleges is nearly $10 billion below what it was before 2008 based on a report by the Center on Budget and Policy Priorities.
The lack of government funding is leaving students with a higher burden to cover admissions costs.
The issues facing higher-education, wages, and living costs are ones that have been the topic of discussion for years, yet they continue to be ignored. Much like a doctor’s responsibility is to assess a patient’s symptoms and then identify the root cause of those symptoms, lawmakers need to do the same.
We don’t need a new solution for repayment. We need a new solution to the escalating cost of higher-education, low wages, and the rising cost of living.
If Alexander really wants to do something to help students with heavy debt, he should focus on increasing government funding for higher education, not garnishing the wages of young college graduates.
Until a proposal for preventing student loan debt is considered, student loan repayments should remain voluntary and affordable.
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