COVID-19 Exposes Extent of Student Debt Crisis

In August 2020, Politico’s Bianca Quilantan reported on how COVID-19 has affected colleges and universities across the US. According to the article, the pandemic forced many schools to close their campuses, which led outraged students and parents to file more than 150 lawsuits seeking the refund of tuition and other fees from their schools. Toby Eveland, a Chicago-based lawyer who represents colleges and universities in legal battles, told Politico, that the parents and students bringing these suits were “seeking the difference between the value of online learning versus the value of live in-person instruction in a physical classroom.”

The pandemic, Quilantan wrote, had led many families to question whether a college education is worth the hefty price tag, and to ask how we it can be that a year of a private college education often costs more than the average annual salary in the US. As Quilantan reported, “Between the 2007-08 and 2017-18 academic years, prices for undergraduate tuition, fees, and room and board at public institutions rose 31 percent after adjustment for inflation. At private colleges, the price tag rose 23 percent.”

Concern for the rising cost of a college education is linked to another crisis that has received relatively more news coverage, the student loan debt crisis. As described in an April 2020 Monthly Review Online article by David Ruccio, the debt crisis dates back decades but, like so many other social trends, the pandemic accelerated its impacts and brought student loan debt to the forefront.

Ruccio reported that students and their families currently owe the federal government $1.3 trillion in student loans. The weight of student loan debt falls disproportionately on students whose families are in the lower fifty percent of annual income. For that group, “the largest portion—almost two-thirds—of their total installment debt goes to finance their own or their children’s education,” Ruccio reported. By comparison, student loan debt accounts for just 19 percent of installment debt owed by students whose families are in the top ten percent of annual income.

The impact of the pandemic on universities has been discussed in corporate media during the last year, mostly in terms of how colleges and universities have been financially impacted, while ignoring or downplaying the significance of the student loan debt crisis. For instance, in June 2020, Forbes reported on the impact of COVID-19 on the marginal cost of college, and how private institutions were attempting to lower their tuitions during the pandemic. However, the Forbes article reported that, according to David Rosowsky, a professor and a former senior vice president at the University of Vermont, “Student loan debt should not increase as a result of the COVID-19 pandemic unless it impacts the time-to-completion.”

Sources:

Bianca Quilantan, “A Reckoning for College Tuition,” Politico, August 17, 2020, https://www.politico.com/newsletters/weekly-education/2020/08/17/a-reckoning-for-college-tuition-789945.

David Ruccio, “Student Debt Jubilee—Pandemic Edition,” Monthly Review, April 21, 2020, https://mronline.org/2020/04/21/student-debt-jubilee-pandemic-edition/.

Student Researcher: Aidan Kazazes (Indian River State College)

Faculty Researcher: Elliot D. Cohen (Indian River State College)

The post COVID-19 Exposes Extent of Student Debt Crisis appeared first on Project Censored.

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