Choosing a House, Car or an Education: The Crisis of Student Loan Debt

By:  Arit Essien*

Move over buying a house or a new car.  The privilege of pursuing a higher education has now become one of the largest investments in a person’s lifetime.

While the advantages of higher education are well-noted, the looming student debt following college has become increasingly problematic, particularly for millennials eager to set foot towards pursuing the American dream of homeownership after school.

The statistics are worrisome.  Between 2002 and 2012, the National Center for Education Statistics reported a 40 percent increase in public school tuition, and a 28 percent increase at private schools—a rate four times faster than inflation.  In 2013, Forbes calculated outstanding student loan debt in the United States to be in excess of $1.2 trillion, which exceeds total credit card debt in the nation.  According to the New York Federal Reserve Bank, 37 percent of the 43 million people currently repaying these loans have experienced delinquency or default at some point. For millennials, this can translate into offset or delay of critical life events such as purchasing a home, marriage or the decision to have children. 

In the realm of financial obligations, student loans are in a league of their own.  Unlike traditional debt, student loans cannot be discharged in bankruptcy, due in part to the bankruptcy reform bill of 2005.  Prior to passage of the bill, only federal student loans were exempted from discharge.  Additionally, for private loan recipients, options such as deferment, forbearance or income-based repayment are less frequently available.  Private loans traditionally also cannot be discharged upon death, so virtually there is no escape from repayment. 

Though hope of student loan reform may seem elusive, several proposals offer promise.  One proposed solution is to link state and federal aid to accountability metrics such as student graduation rates.  This could motivate schools receiving loan fees, despite the subsequent fate of their student, to play a greater role in the accountability of both the amount of money that students borrow and in ensuring that the overall benefits derived from the education is commensurate. Private loans however, which offer greater risks for borrowers, are overlooked in this approach.  

At-Large Councilmember David Grosso encourages student loan reform initiatives that will help borrowers and millennials keep money in their pockets for important life events and obligation. According to Grosso, “If borrowers have to expend a large portion of their income on student loan payment, it can be economically disadvantageous.  When former students default on their obligations, the burdens then shifts to taxpayers. We have to explore creative solutions that will afford lenders timely repayment, without stealing the American Dream from those who worked so hard to obtain it by pursuing their education.”

What are your solutions for improving the student loan structure?
Twitter: @cmdgrosso

*This post is part of an ongoing series of posts by Councilmember Grosso’s staff to support professional development. All posts are approved and endorsed by Councilmember Grosso.
    

The Importance of Financial Literacy

By: Matthew Nolan*

As April is Financial Literacy Month, I wanted to explore its value, identify what it really means to me and highlight programs available to all D.C. residents.  Financial literacy is the knowledge of financial and economic matters. This is becoming more and more important to people around me. I am a junior in high school right now and money is a big concern for me and many of my classmates. This year we are breaking down our college options and a big part of what we are looking at is the huge price tag associated with many schools. I need to make sure that I assess all of my options before taking the step to college, but I cannot if I do not know how I will be able to pay for college, or what my financial situation will be after college. School Without Walls, and all other DCPS and D.C. charter schools have a D.C. College Access Program advisor, a person specifically employed to help students get through the financial obstacle of applying for college. This person helps people who may not be able to have afforded college find the way to pay for it so that all students have the opportunity to avail themselves of a higher education. With initiatives like college access, students in the public school system are becoming more financially aware and are being helped with the college process, it is a win-win situation.

Financial literacy is extremely important. Managing your money is essential to becoming a fully independent adult. As I look ahead to college, I recognize that preparing myself now is key because this is the beginning of my road to financial success in the long run. I need to learn the ins and outs of the financial world before I get to college and have to use all the information I have been provided. If we are not financially literate we will struggle with money management, which could potentially leave us stuck in debt from college and other big investments like buying a house or a car. These are important undertakings in life but lots of people are going into these financial transactions without the full knowledge needed. That is why we need to have more public and widely known programs that can teach the public how to be financially literate and how to use the money that they have to get the best opportunities.

Recognizing the importance of financial literacy, the District of Columbia established the D.C. Financial Literacy Council through the enactment of the Financial Literacy Council Establishment Act of 2008.  While this is an important step.  There is still more work to do. 
I am personally grateful to have a college access program advisor; however, in a report card released in 2015, the District of Columbia received an F for their efforts to produce financially literate high school graduates.  This was due in part to the fact that high school courses on personal finance are not required to be taken as a graduation requirement.  Additionally, there is no personal finance content in the social studies standards though economics is included as an elective. 

As the cost of living rises, the cost of a college education increases and wages remain stagnant, it is critical that we are equipping our residents, both young and old with the information they need to gain financial independence, invest wisely and prepare for their futures.

 *This post is part of an ongoing series of posts by Councilmember Grosso’s staff to support professional development. All posts are approved and endorsed by Councilmember Grosso.

The Case for Black History Month

By:  Katrina Forrest*

Just a few days into Black History Month, Beyonce released her new song and video, “Formation,” which managed to instill in me, and many others who look like me, a great sense of pride, empowerment and sheer joy.  

Watching the video, I was moved to tears.  The imagery is powerful, depicting a young Black boy wearing a hoodie, dancing with reckless abandon in front of a line of uniformed police officers; graffiti which reads “stop killing us”; and a police cruiser submerging in post-Katrina waters.

It was incredible, and not simply because one of the greatest contemporary entertainers, who has generally not upset the status quo, took an overt political stance—but also because those images weren’t from 1962. The images, the song, and the cultural context in which they arrived all flout the sentiment that “slavery happened centuries ago” or “the civil rights movement was 50 years ago.”

Those who fervently believe that the vestiges of slavery should be ignored because so much time has past are the same individuals who, year after year, heap criticism on Black History Month. From Blacks and people of other races, the argument most commonly employed to oppose Black History Month, is that is unfair to devote an entire month to a single group of people.  The usual complaint goes something like, “Well, why don’t we have a White History Month”?  This argument only makes sense if you have no understanding of the historical—and enduring—systemic persecution and discrimination that has faced people of African descent in the United States.

From slavery, to Jim Crow, to Ferguson, MO and Baltimore, MD, American imagery and society at large, has notoriously depicted blackness as uneducated, combative, aggressive, dangerous, promiscuous, and unworthy of basic human rights. As Black people, we have endured and continue to suffer from the impact of racism, which presents barriers to social and economic participation, resulting in entrenched disadvantage and social exclusion.  

I was hopeful that with the election of President Barack Obama we would see meaningful change in the way Black Americans were perceived and discussed.  Unfortunately, racism that had been characterized by a certain subtlety was re-enlivened, more bold and overt than I can ever remember in my short 30 years on this earth. 

Since his election, we’ve seen innumerable racist attacks on the President, Paula Dean’s longing to return to a pre-Civil War era America, outrage over a Cheerios commercial depicting a multiracial family, and the alarming rate at which Black people continue to be murdered by the police.    

All of this is exactly why Beyonce’s latest song and video are so powerful and important—they cast Black people as beautiful and resilient.  Performing the song at Super Bowl 50, in the year of the 50th anniversary of the founding of the Black Panther Party, Beyonce held the torch for Black activism and showed the masses that our Black is excellent.  In that moment, she made it okay to not fit European beauty standards, she made it okay to be unapologetically bold, Black and extraordinary.  How fitting all of this occurred in the month designated for the recognition of Black contributions to America.

In 2016, Black people are still fighting for personhood. We are still fighting for the recognition of our inherent value.  This is the reality that must be grappled with when someone asks, “Well, why don’t we have a White History Month”?  Until we no longer need to rely on Beyonce and our other celebrities to use their platforms to validate us, to embrace our beauty and show us we are worthy; until Black history becomes a subject thoroughly incorporated into the core curricula of schools across the country; until Black people, who account for merely 13 percent of the U.S. population, no longer represent three times that in the prison population; until White families no longer hold 7 times the wealth of Black families; until the Oscars finally recognize the contributions of Black actors, actresses, producers and directors; until our dead bodies are no longer being left in the street to rot for hours; there remains an incredible case for Black History Month.

*This post is part of an ongoing series of posts by Councilmember Grosso’s staff to support professional development. All posts are approved and endorsed by Councilmember Grosso.