We are having a big discussion this week about the interest rates of student loans. This discussion is about a small amount of money (relatively) affecting a small number of people (relatively) and glosses over the huge issue of economic mobility. We know statistically that the most common way to move from poverty to the middle class or beyond is through getting a good college education. Without access to that degree, we know wages are generally much lower and the probability of being unemployed is much higher. If we price people out of being able to get a college education we reduce upward mobility and for many the American Dream of a middle class lifestyle becomes unattainable or is delayed by many years because of high debt after graduation. We know that states have cut back the amount of money they provide for state colleges. We know that the cost of college tuition has gone up nearly 600% since 1980, outstripping increases in wages by around 3x. We know that the only other major industry has seen its costs go up at such a high rate is health care.
If we know college is too expensive and that a college education is the most common way for a poor person to rise it seem obvious that it must be addressed if we want to have a better economic future with less income inequality. Of course, the earning power and competitiveness of our economy affects everything else. Can we afford not to address this and still have a big expensive military? Can we maintain high employment without a workforce that can perform as well or better than our foreign competitors. These are big questions that must be answered if we want to maintain economic position.
This political dust up over student loan rates should be an opening to start addressing this issue. It is at the core of what we call the American Dream and the status quo is unsustainable if we want our children to be as well off or better off than we were