by Ben Cohen
I someone had told me that I would be tens of thousands of dollars in debt after college and unable to pay what I owed for decades, I probably would have avoided college altogether.
I don’t like debt, and try to avoid it at all costs. I was lucky enough to be born into a family with money, so I got an enormous head start and did not have to pay my way through college. Still, I wasn’t handed lots of money on a plate, and I never lived beyond my means. The thought of doing so makes me feel uneasy, as owing people money is perhaps the least enviable situation to be in.
Most of my friends in the U.K were not so lucky and either worked jobs or took government loans to get through university. Friends of mine in the U.S had it even worse, and many of them are now hundreds of thousands of dollars in debt. They are all fearful that they will never be able to pay back their loans given the current job market and their low paying salaries, and the future isn’t quite as rosy as it was when they graduated.
The situation in the U.S is now so severe, that many are now referring to the enormous debt built up by students as a new form of indentured servitude. Mike Konczal in the Atlantic provides the explanation and analogy:
The prevalence of this debt, especially among the young
and the poor/working classes, the transformation from a rounding error
amount to a significant burden amount over the past 30 years, the
length of term, the idea of mobility and “transport” to a job, debt
secured not by property but by personhood, and limited legal recourse.
All these characteristics are similar. The limited legal recourse is
noteworthy here, since unlike most debt, it isn’t dischargeable under
bankruptcy, thus it doesn’t have a natural protection for the consumer
receiving credit (a protection, the original synthetic put option, that
our Founders were aware of enough to make sure it was provisioned for in the Constitution).
The economics of this new slavery is pretty simple. Wealth in America (and in the U.K) is concentrated at the very top of society — the richest 1% of the population own more than 95% of the rest of the population, and social mobility (the prospect of rising through the economic classes) no longer exists. As wealth continues to be funneled upwards, the middle classes have less and less disposable income and must go into debt to ensure they maintain the same standard of living. Education costs money, that too goes on the credit card (so to speak). Given the new economic order, when your income fails to cover debt, you essentially become a slave to it. And the worst thing about student debt, is that you are personally liable for it. So you can never, ever escape.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.