America’s Aging Student Debtors
On a warm October evening in 1932, Franklin Delano Roosevelt stood on a baseball diamond in Pittsburgh, delivering an impassioned speech on the unlikely topic of passion: the federal budget. “Sometimes somewhere in this campaign I have to talk about dollars and cents, and it’s a terrible thing to ask you to listen for forty-five minutes to the federal budget story, but I’m going to ask you to do,” he told the crowd. At the back of the park, a two-year-old black girl named Betty Ann sat on the shoulders of her father, Robert, as he struggled to choose the man he was sure would become president. Robert was a hard-line Republican – his grandfather, a Virginia slave, had been enfranchised by President Abraham Lincoln. Still, he felt compelled by FDR’s message. Hard times had meant he had begun paying reporters for the Pittsburgh Black newspaper, which he ran, out of his own pocket. Much to his distress, his wife had taken to standing in the relief lines in order to feed Betty Ann and her sisters. A few weeks later, when Robert voted for FDR, he wept in dismay at voting against Lincoln’s party. Thereafter, he became a devoted Democrat and engaged fervently in local politics until he fell ill five years later. He had two final wishes: for his wife to assume her role as Democratic ward chairman and for Betty Ann and her sisters to go to college.
The family was successful on both counts: as parish president, Robert’s wife maintained the family home as the backbone of the community, and Betty Ann, who requested that she and the members of her family are identified only by their first name, grew up with a constant stream of neighbors. through the house. Although her mother had no money, Betty Ann was an excellent student and earned enough scholarships to earn a bachelor’s and master’s degree in education. Over the next few decades, she worked as a public school teacher in Pittsburgh and Harlem, in addition to raising two children as a single mother. But she grew increasingly frustrated with the marks of educational inequity — moldy lunches, shoddy reading materials — that plagued her classrooms. “I thought the only way to change things was to get an advanced degree,” she told me.
In 1983, at the age of fifty-two, Betty Ann enrolled in law school at New York University. As a middle-aged black woman, she wasn’t exactly the typical NYU law student. Her white male classmates slyly pushed her books across the long tables in the library, and once, as she stood in front of her locker, a classmate waved her a check for ten thousand dollars, signed by her father. , in front of his face. Betty Ann had borrowed twenty-nine thousand dollars in federal loans. Today, she owes $329,309.69 in student debt. She is ninety-one years old.
Americans age sixty-two and older are the fastest growing demographic of student borrowers. Of the forty-five million Americans with student debt, one in five is over fifty. Between 2004 and 2018, student loan balances for borrowers over the age of fifty increased by five hundred and twelve percent. Perhaps because policymakers viewed student debt as the burden of upwardly mobile youth, inaction seemed a reasonable response, as if time itself would solve the problem. But, in an era of falling wages and rising debt, Americans aren’t getting old on their student loans — they’re getting old.
Credit assumes that what we cannot afford today can be repaid by the richer self of tomorrow – a self that is the richest because wealth mobilized by these debts. Perhaps no form of credit embodies the myth of a richer future better than student loans. Under the vision of liberal economist Milton Friedman, student loans emerged in the 1950s as an outgrowth of “human capital” theory, which posits the self as, above all, a unit of investment. Lending money so that people were educated was not only a good investment – borrowers were sure to get well-paying jobs that would allow them to repay the loan – but smart macroeconomics: more educated people would increase the Country’s GDP Education would be a perk.
But the influx of aging debtors calls into question the principle of education for human capital. The erosion of union density, falling wages, and skyrocketing tuition fees have all made college less of a path to high-paying jobs and more of an escape for the lowest-paid. Those who have incurred debts are increasingly unable to repay them; many have not even received diplomas. The student debt crisis is particularly severe for black borrowers. Racial wealth gaps mean black debtors borrow more to attend college and carry their balances longer, effectively paying more for the same degree as their white classmates. Four years after graduating, nearly half of black graduates owe more on their loans than their original balance, compared to just 17% of white graduates. As a researcher and organizer of the Debt Collective, the nation’s premier debtors’ union, I am familiar with the notion of debt as a poor tax – those who have less end up paying the most. But it was a revelation to me when I realized that seniors are the fastest growing population of student debtors. Debt, I have since come to understand, is also a tax on time – it seizes the future and corrodes the present, depleting health, wealth and the pursuit of happiness.
Older student debtors are not exceptional cases in the growing student debt crisis; their experiences are, in fact, indicative of its distinctive characteristics. Rising interest, looming balances, faulty relief methods, and falling wages are forcing all borrowers to take loans for longer and longer, pushing student debt through generations. Older debtors mix their income between credit card bills, house payments, car loans; student debt, often the furthest removed from their daily lives, is repaid last or not repaid at all. For aging borrowers with declining incomes, the crisis is acute: student debtors over sixty-five are defaulting at the highest rates. In 2015, more than a third of borrowers in their age bracket defaulted on their student loans.
“Years and years of erosion of labor rights means that wage power has not kept up with student debt,” Randi Weingarten, president of the American Federation of Teachers, told me. As such, student loans don’t get people out of the working class; they only change the accounts of the people who live there. David Ormsby, 50, for example, had worked for eight years at a Home Depot in Detroit when he decided to go back to school. “I wouldn’t call it a dead-end job,” he said, but he felt he couldn’t progress without a higher degree. In 2005, he began studying part-time at a local university to earn a bachelor’s degree in supply chain management, while raising his two sons and working more than fifty hours a week. Today, he has close to ninety thousand dollars in student debt. The degree helped him get a job in automobile manufacturing with higher earnings and more satisfaction than his previous job. Yet the monthly loan payments of five hundred dollars are difficult to manage. Ormsby started working a second job delivering groceries to make his loan payments. “Going back to school was good,” Ormsby said, but he’s frustrated at turning seventy before he can start saving for retirement.
Although most older student debtors borrowed money for their own education, about a third took out loans in the name of a child or grandchild. Unlike direct federal loans, which have borrowing limits, parents can take on virtually infinite debt—up to the full cost of schooling each year—to fund their children’s education through a program called Parent Plus. Loans to parents often come with punitive conditions, such as significantly higher interest rates and few options for redress. Parent Plus recipients are only eligible for one type of income-based repayment program, which requires loan consolidation; the possibilities of canceling public service loans are extremely limited. Some parents are obligated to pay loans even if their child dies. Eighty-year-old Calvin Nafziger pays two hundred and fifty dollars a month for private loans for his son, who died three years ago. “I’ll probably be dead myself before I finish paying them,” Nafziger said.
Student debt can plague borrowers to their last breath, jeopardizing even the government’s meager protections for seniors: Social Security. Student loans in default can prompt the Department of Education to order the garnishment of tax, salary, and Social Security refunds. In 2015, more than two hundred thousand student debtors over the age of 50 saw their social security seized. One of them was Olivia Faison, a retired analytical chemist who is now seventy-one. Faison studied biology, chemistry and music at Queens College in the early eighties. “I was very lucky to be able to go to college with very little debt,” she said, receiving scholarships that paid for the majority of her degree and borrowing about nine thousand dollars for the rest. After graduating, she worked in private industry for several decades. But, when her company downsized in the early 2000s, she was made redundant. As an older black woman looking for a job in science, Faison struggled to get her foot in the door of other ventures. Many potential employers asked him to submit his undergraduate transcripts as part of the application. But, because she still owed money for her undergraduate degree, Queens College refused to release her transcripts. (CUNY ended that policy, known as the transcript ransom, last year.) “My way of getting a job after 2001 was very inconsistent,” Faison said; she held mostly temporary jobs for the next thirteen years. As his income declined, his loan repayments became sporadic.