In response to Mr. Burroughs’ September 1st letter suggesting President Biden is attempting to “buy” votes via the Executive Order forgiving $10,000 in student loan debt and $20,000 for those having Pell student loans, I suggest he consider the following points.
I’ll begin by saying that I have no idea of Mr. Burroughs’ age and/or when he attended college and repaid his student loans. I do know that the figures for me (a 1978 NY state university graduate) and my son (a 2012 graduate of a FL private college) were a real eye-opener on how expensive college has become. And yes Mr. Burroughs, we both repaid our student loans.
Based on data from educationdata.org (using figures for the period 1975–1981 and 2021) the average price per year of tuition, fees and room and board has gone from $1,386-$2,927 to $21,337 for a public college and from $3,669-$5,594 to $46,331 for a private college.
This website also notes that today’s average student borrower takes 20 years to pay off their student loan debt with some professional graduates taking over 45 years to repay student loans. Also of note is that 21% of borrowers see their total student loan debt balance increase in the first five years of their loan. With those numbers in mind, having $10,000 or $20,000 of debt forgiven, although a big help, is not the end of a graduate’s commitment to loan repayment. Many graduates are unable to find jobs and those who do are often underemployed. June 2020 data from the Federal Reserve Bank of New York shows that 39% of recent college grads are underemployed.
Following graduation, it’s time to find a place to live and begin the next phase of post college life, so apartment rental is now a new expense. According to ipropertymanagement.com, average rent prices have increased at a rate of 8.86% per year since 1980, consistently outpacing wage inflation by a significant margin with 2021 logging the highest rent spike on record. The nationwide average monthly rent in 2020 was $1,164, with 28.4% as renters’ average rent-to income ratio.
Taking a look at car loans (because recent college graduates need transportation to their new jobs), Kelley Blue Book reports that in September 2021 the average new car price in the U.S. was $45,031, which marks the first time in history the average transaction price has crossed the $45,000 mark. A report from CarBuzz from almost five years ago shows the average new car price then was $34,077, which in turn was 12.6 percent more than the value five years before that.
Taking just these three expenses into consideration as college graduates enter the workforce, having help to adjust to life after college with forgiveness of some of their student loans is vital. In reference to Mr. Burroughs’ comment on Robin Hood, I believe helping the poor (or new college grads with growing financial commitments) would be something with which Robin would be pleased.
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