The majority of college students have to finance their education through unfair lending options.
By: Hillary Van Hoose, Copy Editor
Half of LACCD’s students seek to transfer, but 50 to 62 percent are also low-income, food insecure and/or housing insecure, and 19 percent even identify as homeless, according to LACCD’s Fast Facts document.
With stats like these, how do Valley students earn an education? About 50 percent of LACCD students receive fee waivers and 23 percent are awarded Pell grants.
What about students who want careers requiring master’s or doctoral degrees, you may ask? Their financial aid options are largely limited to unsubsidized private or federal loans, which have high interest rates, fewer consumer protections, and can begin accruing interest while students are still in school.
In fact, those with master’s degrees carry an average debt of $83,651 and those with doctorates carry $134,797, according to Bankrate. That means, according to Brookings, that graduate students take on more than half of all student loan debt despite accounting for only one-quarter of student loan borrowers.
This lack of non-predatory financial aid choices for grad school forces students to either stop at the undergrad level or to finance their education through debt, which makes housing, medical, and food stability fragile for students after graduation, and often for the rest of their lives. It also makes repaying loans an impossibility for the vast numbers of people who don’t find gainful employment after graduation.
By the way, “gainful employment” does not mean working minimum wage internships and assistant jobs for the next 10 to 15 years. If this is all that the majority of grads from a given college or university program can get with their degrees, no matter how prestigiously the institution might be ranked, it’s a scam. The U.S. Department of Education defines the term “gainful employment” to mean that, within four years after graduation, your job pays you enough to have a “debt-to-earnings ratio of less than 20% of discretionary income or less than 8% of total income” based upon the
“relationship between median student loan debt and average annual earnings” of those who have previously graduated from the same program at the same school.
Why is it so hard for low-income populations to repay their loans? For one thing, low-income students borrow more in the first place.
While the Department of Education says that more than 43 million Americans hold student loan debt, an analysis by the Consumer Financial Protection Bureau shows that 90 percent of students identifying as African American and 72 percent identifying as Latino take out loans to pay for their education. Additionally, the St. Louis Federal Reserve Bank estimates that 47 percent of women hold student loan debt, compared with 40 percent of men.
Also, earning an education does not prevent bias-based wage gaps.
A report by the BLS (Bureau of Labor Statistics) shows that women, racial minorities, and disabled graduates earn significantly less than others. On top of the BLS and Census reporting that people with disabilities have greater difficulty obtaining full-time employment and earn far less than non-disabled workers, they also need to earn what the National Disability Institute calculates as 28 percent more income per year just to stay alive.
This combination of compulsory debt and discrimination creates a bottleneck on high-earning professions by discouraging or preventing students from underserved communities from earning degrees that allow them to enter such professions, and punishing those who do.
In short, predatory student loans keep low-income and historically oppressed populations from using education to climb out of poverty, and pushes middle-class families into poverty.
With tuition and fees alone increasing by 6 to 8 percent annually in the past 20 years, according to U.S. News & World Report, something needs to change. But what?
Providing graduate students the same financial aid options available to undergraduates would be a good start. Then again, organizations like the Brookings Institute and politicians like Bernie Sanders have advocated making higher education free for students and canceling existing loan debts.
Extreme? Not when you consider that free higher education for all was part of California’s Master Plan all along.
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