18
SEPTEMBER 20, 2021
GRAND RAPIDS BUSINESS JOURNAL
COMMENT & OPINION
GUEST COLUMN Lou Glazer
Don’t believe the student loan crisis hype
T
ype “student loan crisis” into the Google search engine and you get 58 million results. Over and over and over again, we are told that today’s college students, particularly those who pursue a four-year degree, are saddled with debt so large that they are more likely to be paupers than prosperous. So as conventional wisdom goes, high school graduates (except for our own kids, of course) are better off forgoing a four-year degree and learning a trade at a community college or in an apprenticeship program. There is one problem with this oft-told story: It is simply not accurate. America does not have a student loan crisis. And that’s not to mention that the behind-in-payment rate for those with a bachelor’s degree is substantially lower than for those who have an associate degree or no degree, including those with non-degree credentials.| Compelling evidence of the absence of a student loan crisis comes from The Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2020. An entire chapter of the report is devoted to student loans. The Fed’s key findings: • The share of adults who were behind on their payments is much lower when accounting for all borrowers, including those who had completely repaid that debt. Among those who have ever incurred debt for their education, 9% were behind on their payments at the time of the survey, 42% had outstanding debt and
were current on their payments, and 49% had completely paid off their loans. The median amount of education debt in 2020 among those with any outstanding debt for their own education was between $20,000 and $24,999. • Among those with outstanding debt from their own education, 18% were behind on their payments. Those who did not complete a degree were the most likely to be behind. Thirty-one percent of adults who had education loans outstanding and who had less than an associate degree reported being behind. This compares to 22% of borrowers with an associate degree. The delinquency rate was even lower among borrowers with a bachelor’s degree (9%) or graduate degree (8%). • Repayment status also differed by the type of institution attended. More than one-fourth of borrowers who attended for-profit institutions were behind on student loan payments, versus 10% who attended public institutions and 5% who attended private notfor-profit institutions. It is accurate that for student loan borrowers under 40, first-generation students and Blacks and Hispanics have higher shares of adults behind on their payments: 16% for first-generation students vs. 4% for non-first generation students; 23% for Blacks and 20% for Hispanics, compared to 4% for Asians and 6% for whites. The most important finding may well be the self-reported well-being of 18-39-year-olds by education attainment and student loans status:
• Of those who never took out a student loan, 93% of those with a bachelor’s degree or more say that they are doing at least OK financially, compared to 74% of those with some college or a technical or associate degree. • Of those who have paid off their student loan, 92% of those with a bachelor’s degree or more say that they are doing at least OK
financially, compared to 65% of those with some college or a technical or associate degree. • Of those 18-39 still paying off a student loan, 80% with a bachelor’s degree or more say they are doing at least OK financially, compared to 52% of those with some college or a technical or associate degree. CONTINUED ON PAGE 21
MI VIEW WEST Garth Kriewall
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GUEST COLUMN Doug DeVos
A question for Constitution Day C
onstitution Day is an overlooked holiday. Yet Sept. 17 should not go unnoticed. The foundational principle of our governing charter is at risk of being forgotten. Recalling it is essential to our national future. With the distance of 234 years, it’s easy to forget the revolutionary nature of the Constitution. Like every country, America’s founders asked themselves a simple question: Where does power come from? Yet unlike every country, they gave a radical answer. It is the Constitution’s first three words: “We the people.” This principle turned history on its head. It recognized the truth that you and I and all our fellow citizens are the ultimate authority. The Constitution set forth a powerful standard for Americans to meet. From the moment those words were written, it was obvious: America fell short. Our country has allowed terrible wrongs to exist, most notably slavery. Such injustices made “we the people” more hope than fact. They concentrated power in
the hands of a few, despite the moral mandate to empower the many. Previous generations strived to uphold that promise. The abolitionists helped end slavery after the Civil War, the suffragettes won the right to vote for women, the civil rights movement moved us closer to equal protection under the law, and so many others have written the story of American empowerment. With each barrier that was broken, the country moved closer to “we the people.” But somewhere along the way, progress stalled, and even reversed. Not in every respect. The quest to empower all our fellow citizens is alive and well in movements for equality under the law, criminal justice reform, a better education system, and economic opportunity for all, among others. Yet in other ways, the recent trend has been to disempower people. Power is being taken from the many and given to a select few. This trend takes many forms, and it defies a simplistic left-versus-right framework.
To start, our elected officials have asserted control over ever more of daily life. Across both parties, there is a growing sense that nothing is beyond the government’s purview — that all questions can be resolved by federal legislation and executive orders handed down from on high. Elected officials also have delegated their power to the judicial branch. Rather than take hard votes on tough issues, they’ve asked the Supreme Court to decide some of the most divisive and consequential issues. Yet the American people gave lawmakers the power to legislate, and by giving that power away to unelected judges, we the people are less able to hold our leaders accountable and shift the policies that govern our lives. Finally, our elected officials have created a government insulated from the people’s control. It’s called the “administrative state,” and it’s so large, even Washington, D.C. doesn’t know how many departments, agencies and commissions it has created. This vast bureaucracy has
authority to control the economy and even create federal crimes — 300,000 and counting. Yet no American ever voted for it, and none of us can vote against it. Do we really want power to reside with the unelected and unaccountable? All three problems are getting harder to ignore. Americans of all political stripes are wondering why so much power has been granted to so few people, with so few limitations on how they can wield it, and so few consequences when they overstep their bounds. There’s no better day to think about these challenges than Constitution Day. And there’s no better time to ask the question that animates that document: Where does power come from? The answer is “we the people” — all of us, not merely some of us. It’s as radical now as it was on Sept. 17, 1787. And it’s just as important to return and keep that power where it belongs. Doug DeVos is co-chairman of Amway and chairman of the National Constitution Center.
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