Part of the problem is that the current student loan system was devised in an era when it was more equitable.
Basically prior to about 1970, tuition was free, or close to it at many state schools. After that, it was still subsidized pretty heavily. Sometime in the first decade of the 2000s, they stopped subsidizing it so much, and costs shot through the roof for many students.
So the loan system that was devised in the mid 1960s worked extremely well through about 1970, then well enough through the early-mid 2000s. When I went to college (early-mid 90s, state school), tuition was essentially trivial compared to room & board. I think we paid something like $130 per credit hour(!) back then. So $15k a year was financing a full year of courses and a pretty cushy student lifestyle. You’d graduate with around 60k in debit and paid in the $300-400 per month range. That’s basically the all-in, fully-financed option. Most people worked, saved, had other scholarships, lived at home, etc… so they weren’t financing that much.
But once the states stopped subsidizing tuition and the prices shot through the roof, it became a different story. Suddenly getting a degree was less like buying a car, and more like buying a fairly nice house. And most college students of any era haven’t been able to support that on entry level wages, regardless of their field of study.
The other thing was that for people of my era, college in the early 1970s, the interest rates on student loans were capped well below market.
Reagan (IIRC) changed that. Suddenly instead of those loans being a regulatory cost pushed onto banks that had to reluctantly supply them, they became a very profitable lending opportunity at full market, or above market, rates.
I had no student loans (Thank you Dad, my job(s), and later AFROTC) but my now-late wife did. She finished law school at age 25 and when we got married she was 32. And even then 7 years post-graduation with plenty of cash flow she was paying the bare minimum on that loan because at something like 2% interest, so less than the then-tame inflation, dragging that loan out as long as possible was a pure moneymaker. For us.
This difference works synergisitcally w @bump’s comments just above.
And as we all know, if you provide a loan with a long payback term, the interest costs totally dominate the principal payback. Not so for a short term loan.
So back then you had small loans at low or negative real interest rates that you could slow roll a lot to your advantage. Now you have large loans at high rates with a long term just to keep the monthly payment barely affordable. But that long term means the lifetime interest cost of the loan is 2 or 3x the face value. All the advantage belongs to the banks.
And not by accident. It’s a direct result of Republican legislation.
Even at that, the tuition subsidies/caps kept the total loan amounts in check. I mean, I recall financing your entire education wasn’t exactly preferable, but it was doable. And paying as you went by working and/or having your parents help out was also feasible when you were looking at something like 2-3k a semester back then. At any rate, the “big” undergrad scholarships at my school were in the $10k range, and while they weren’t a full four-year ride, they were around 75% of it, I’d estimate. I had my math off above; it was considerably cheaper than what I was thinking- like half that. For some reason, I got the total amount of the scholarship confused with per-semester amount. It was 10k total for four years, not 10k a semester.
Now at the same school, they’re estimating about 60k for a four year degree. That’s like five or six times the amount it used to be. Even accounting for inflation, we’re still talking twice or three times.
TL;DR: Even poor interest rates and long payback times aren’t so bad if your total loan amount is still relatively small, which they were in the 70s through the early 2000s.
I started college in the late 80s. An entire year of tuition was about $1000 at the state university I attended. I couldn’t imagine anyone getting out of college back then with much student debt, at least at cow-town U that I went to.
Just checked my old state university - tuition is literally a little more than 3x as expensive accounting for inflation. I lived at home and commuted to school while working part-time those first few years. Even at the munificent minimum wage of $3.35/hr that first year, I was able to pay my own tuition, books, entertainment, clothing and transportation costs with usually only minor if any difficulty. By the time I moved out I was paying token rent, had a full-time job and had switched to going to school part-time. Never had to take out a loan.
Same. And, minimum wage was also $3.35 when I started college. My apartment rent was $95/month. Can you imagine being able to pay your rent with only 28 hours of federal minimum wage today?
What’s wild to me is that with the advent of unsubsidized, market-rate tuition, the schools are now competing among themselves and trying to differentiate themselves via amenities and the like, and since there is more money flowing around, the businesses and restaurants that cater to students are a different class than when I was in school. We typically ate at cheap places, ordered cheap pizza, drank cheap beer, etc… because that’s what we could afford, and that’s what the places near us provided. Now it’s all nice, which is kind of a culture shock. Both on and off campus in fact.
University of Texas in the early 80s was $250/semester (about $50 tuition and $200 fees). The legislature believed in low tuition/limited aid back then, looks like they still do at around $12K/year in-state.
That said, cheap housing was easy to find back then, I’m 100% sure it ain’t cheap now.
I started there in 1989 and going by memory it was $4/hour for tuition when I started, and that doubled every year until I graduated in 93. This was a deliberate attempt to bring tuition up to a price similar to other comparable schools.
For the entire 4 years I got $400/month in “allowance” from my parents to cover rent, food, and incidentals. I was cheap by nature, but I also never felt strapped for cash or broke like some people I knew.
To bring it back to the leopards, Republican legislatures are frequently hostile to funding higher education. Many of their constituents cheer that, because why give handouts to those do-nothing academics in their ivory towers? The face biting comes when the schools have to raise tuition because they often operate at a loss per student they teach. All of the sudden the middle class families need loans to get their kids through a state school.
Now you’re looking at leopard ravaged young adults trying to find opportunities without a college degree, or starting with a college degree and a huge loan dragging them down.
And what’s fair about a rich kid whose parents pay for their college so that they can earn a decent living, and a not-rich kid who has to be burdened with massive debt to pay for the same college? When both are told they need this education in order to achieve a decent life?
All of those things are about facilitating farmers selling direct to SNAP recipients and similar. It’s about farmers trying to cut out agribusiness middlemen so they can get a bigger slice of the SNAP benefit pie for themselves.
Which is actually a decent idea on its merits. As well, you’re certainly right the farm lobby isn’t trying to kill SNAP. But a decent bet many (most?) individual farmers if asked would favor cutting government payments to poor people.
The answer probably depends heavily on how you ask the question and whether they twig to the fact that for this payment they themselves benefit and for that payment they don’t. Cash for food good; cash for rent bad. Of course the real estate industry feels the opposite.
