True Stories of Student Debt

Welcome to America's next great financial crisis. Can we get a bailout?
On March 5, 2012, students gathered in Sacramento to protest tuition hikes and the impending student debt crisis. (Photo: Getty Images)
Mar 15, 2012· 3 MIN READ
Originally from Baltimore, Oliver lives and writes on a quiet, tree-lined street in Brooklyn.

Five months after graduating with a masters from the University of San Francisco, Kyle McCarthy broke his leg in a Bay Area soccer tournament, shattering his knee in the process. Bed-ridden for the next three months, he watched with increasing alarm as his pile of medical expenses grew.

"This happened right when I was supposed to start paying back my student loans, which at the time totaled about $57,000," said McCarthy, 29, to TakePart. "I was without any kind of safety net and was facing thousands of dollars in additional medical debt."

Overwhelmed by bills, McCarthy discontinued medical treatment and physical therapy and went back to work. He began cutting back on personal expenses. Despite this, he found himself unable to keep up with payments and defaulted on his student loans.

McCarthy's frustration with an increasingly predatory student lending system is shared by many. It's why he started the Occupy Student Debt website, which has chronicled more than 700 stories of people in similar straits: students that through a combination of a struggling economy, lack of consumer protection, and bad luck have found themselves buckling under punishing interest rates. As McCarthy says, this is not a left versus right issue, but a matter of right versus wrong. "Currently, I owe over $78,000 with late fees and collection fees tacked on, and I have no idea how much medical debt I owe. My credit is completely destroyed. If I consolidate my loans, it will tack on another 18 percent and grow to about $92,000. Like so many other people, I have always taken responsibility for what I borrowed. This being said, I refuse to pay for usury."

Since 1978, college tuition has gone up by 900 percent—five times the pace of inflation and twice the pace of healthcare costs.

The impending student debt crisis has been in the making for decades. Since 1978, college tuition has gone up by 900 percent—five times the pace of inflation and twice the pace of healthcare costs. Student debt is now a $1 trillion problem, more than either credit card debt or auto loans. One of every five former students is defaulting on loans, and there has been a precipitous decline in state and local government support. In the '70s, the government paid $4 for every dollar the student paid. Now, it's closer to $1.60.

"There's a growing sense that in order to attend the elite colleges you have to be either really rich or really poor," says Mona Tijerina, 34, who lives and works in Brooklyn. "The middle class is getting squeezed." She's one of the lucky ones, having graduated from Oberlin in 2000 with $24,000 in debt, which she was able to pay off in two years. When she graduated in 2000, tuition was around $35,000 a year. Twelve years later, it's more than $50,000, a 40 percent increase.

The seemingly ubiquitous tuition hikes—up an astonishing 511 percent since 1999 —aren't lost on current students. On Tuesday, thousands of angry scholars flocked to Capitol Hill to protest a two-fold increase in interest rates set to go into effect in July, handing over 130,000 letters to members of Congress asking to keep interest rates where they are. And Americans aren't the only ones feeling the burn—on Wednesday, Canadian students stopped traffic for 20 minutes on Metropolitan Highway as they gathered to protest Quebec's plan to double tuition by 2017.

While some students are taking to the streets to vent, others are redirecting their energy toward solutions. Speaking at a symposium on student debt at the New School last week, Samir Sonti, a graduate student in political science at Cornell, described a tantalizingly simple solution:

"Free higher education," said Sonti, speaking along with sociologist Andrew Ross and journalist Sarah Jaffe. "It seems like this completely radical concept, but basically every industrialized country in the world provides, if not free, then very affordable, access to higher ed. Right now if the federal government were to pay for every single cent of every single student's tuition, it would be about $135 billion per year, or about 3.5 percent of the budget.... It's clearly very affordable, very doable. It's simply a matter of political will."

Sonti isn't the first to propose the concept of free higher education. Historically, this has already been the case for many universities, including City University of New York, which was free for about 130 years before beginning to charge tuition in '70s. After World War II, the GI Bill sent about 8 million returning veterans to school for free, paying for room and board and providing a living stipend. More than anything, it was an investment in the future: According to one congressional study, for every dollar the federal government spent they recouped $7 in taxes through higher earning and increased productivity.

NYU professor Andrew Ross agrees. "Student debt is not only immoral, in my view, it's illegitimate and it should not exist at all. In the 20th century, we had a society that decided it would have middle-class aspirations for all of its members, and there was a consensus that secondary education ought to be free. A 21st century society that has similar aspirations in a so-called knowledge economy has to make the same decision about funding tertiary education. That's just common sense."

"This is not something that is going to happen overnight," said Sonti. "This is not something that is going to happen through the current Democratic party. But I do think with things like Occupy Wall Street going on, and people simply not being able pay, that if folks start organizing around this on a local level, over the course of five, ten years we might be able to build something."

So what can students do to fight for free higher education? A number of organizations and individuals are already doing great work to raise awareness on the issue, including United States Student Association (USSA), Student Labor Action Project (SLAP), ForgiveStudentLoanDebt.com, Student Loan Justice, and Demos. Individuals like Anya Kamenetz and Robert Applebaum are raising awareness and creating campaigns to forgive existing student debt. As Sonti notes, if we really want to effect change, we all have to take part.