Matthew Boedy, an assistant professor of rhetoric and composition at the University of North Georgia, shares a milestone with us; the final payment of his student loans at age 40.
In a guest column, Boedy explains how the cost of college is much higher today for students due to decreasing public support, leaving too many students with crushing debt.
By Matthew Boedy
Just a few days ago, at age 40, I paid off my student loans for my three degrees. Principal and interest added up to more than $30,000.
Consumer advocate Clark Howard says don't take out loans for college more than the first-year salary in your field. If I remember correctly, I was paid about $24,000 at my first job and I paid just under that for my out-of-state undergraduate degree from a top 10 university from 1997-2001.
My wife and I are celebrating the lack of a $200 monthly payment. But also celebrating the end of debt. (She was lucky enough to get two degrees in North Carolina with no debt.)
And oh, if you don’t remember I am a professor at a regional public university in our fair state. At my school, on average graduates who leave with debt leave with $15,000 in debt.
With these facts in mind, I think I can offer an interesting perspective on our nation’s student loan debt problem.
First, it is a crisis.
More than 45 million Americans are carrying about $1.6 trillion in debt. And 11% of student loan borrowers were 90 days or more delinquent or in default on their loans.
But it has been the growth in the numbers that have made this into a crisis. According to Bloomberg, "student loans have seen almost 157 % in cumulative growth over the last 11 years," making student loan debt "the second-largest consumer debt segment in the country after mortgages."
The AJC has reported "in 2005, the average student loan debt for someone between the ages of 24 and 32 was about $5,000" but that debt doubled by 2014.
I was 26 in 2005, when I consolidated my undergraduate loans at a stable interest rate. By then I had paid off about 25% with a job in journalism then teaching high school.
The Great Recession that began in 2008 had something to do with that doubling as many went back to school or those graduates looking for jobs couldn’t pay off as much as they wanted.
That was me as well. In 2010 I returned to school to get a master’s degree and decided to stay for a PhD, graduating in 2015. While my graduate institution was generous with much (I was paid $12,000 to teach and I got free tuition), I had to buy health insurance from the school.
A spouse salary helped me pay that bill for a while, so I didn’t take out a new loan. But eventually I took out $2,000 a year for four years. While I was in school I didn’t have to pay on any loans, though the interest on all of them grew.
When I got a job as a professor I started to pay off the debt quicker. Summer teaching, outside my annual salary, paid for more. And working a week each year scoring your child's AP exams, paid off more.
And let me add I was HOPE-eligible and chose to go out of state. But during the late 90s, it was cheaper to do that compared to today. My first loan for one semester was a mere $2,500.
Plus, I had the great benefit of a doctor as a father whose job gave him a few thousand per year per child (I have two sisters) for tuition. We all had part-time jobs that paid for most daily expenses.
My story is not one of the extreme examples you sometimes hear on this issue. I have had privileges in other areas that lessened the burden.
But the fact remains for my 20s and 30s, I didn’t get a home loan or buy a new car. I also used what little retirement I had from my two jobs to go to graduate school and didn’t save any while I was in school. My retirement planning began when I was 36.
Many politicians have proposed different plans to either erase the debt or reform the system that gives out loans, grants, and the like. I feel a slight irk noting that I made payments for nine years before I went back to school, just a year under the point many of those plans would forgive undergraduate debt.
Maybe you think it is unfair to work and pay off your debt and then have a younger person get theirs erased.
From someone who has paid off their loans, I would ask you to reconsider that position.
First, women and minorities bear the student loan debt burden more than me, a white male.
Second, tuition has skyrocketed. Annual tuition at four-year public colleges has risen by 36% since 2008, according to the Center on Budget and Policy Priorities.
But that is mainly because states have virtually abandoned public universities. “State funding for public two- and four-year colleges in the school year ending in 2018 was more than $7 billion below its 2008 level, after adjusting for inflation,” according to the Center on Budget and Policy Priorities.
States began to shift the burden of college to students exactly at the moment when the students were facing the worst economic moment since the Great Depression.
Georgia is part of that trend. Our state government reduced funding for higher education more than all but five other states between 2001 and 2017. Though to be fair, the 2019 state budget represents a 4.8 percent increase in state funding per full-time equivalent student (FTE) from last year, according to the Georgia Budget & Policy Institute.
The hard fact is that if you are not in your 20s, you got a better student loan deal than those who came after. In other words, you paid much less than those who got the same degree.
Loan forgiveness isn’t a gift to lazy millennials. It is helping them back to the starting point that we had when we were their age. With some form of debt erasing, they can pay off credit card debt, buy a car or a house, or just participate in the economy more. That helps us all.
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