By Joe Guzzardi
February 22, 2016
Student loan debt has become so burdensome that it’s one of the presidential campaign’s biggest issues. Republican and Democratic candidates alike promise that, if elected, they’ll work toward either forgiveness plans, caps on interest rates or generously staggered payment schedules for overwhelmed graduates.
According to the White House, 70 percent of students who earn a bachelor’s degree will graduate heavily in debt. The college planning website Edvisors found that the average debt for the 2015 class will be more than $35,000 for a bachelor’s degree, $51,000 for a master’s degree, $71,000 for a Ph.D. and $207,000 for a medical degree. Those debt levels have far-ranging negative consequences on the American economy. Some analysts predict that they could, at worst, result in a national crisis similar to the subprime meltdown. At best, such heavy debt—in excess of $1.2 trillion, amassed by 40 million borrowers, and greater than outstanding credit card obligations—delays large ticket item purchases like cars or homes. Because of their dire financial straits, 36 percent of millennials between age 18 and 30 are living with their parents years after their graduations.
Crushing student loans also has an adverse effect on entrepreneurship and jobs. The Federal Reserve Bank and Penn State worked on a joint project which found a direct correlation between increased student loan debt and declining small business creation. Labor Department statistics confirm their findings. In the 1990s, new businesses generated about 7.5 million jobs per year. In the year ending June 2014, that number declined to 5.2 million jobs per year. Presidential candidates agree that millennials are hurting from devastating debt and lousy employment markets where a high percentage of new jobs each month are part-time or in the low-paying service sector.
No one disputes the discouraging numbers or the dismal future many young Americans may face unless they can find a good job that pays enough to get out of debt. Poor employment conditions have reduced job opportunities for many qualified graduates—corporate layoffs and automation among them. Add to that the fact that each month 150,000 jobs must be created to keep up with population growth.
Another compelling Bureau of Labor Statistics’ analysis shows the little-discussed direct link between diminishing American job opportunities that, in turn, perpetuates accumulating debt, and the numbers of new work authorized legal immigrants that enter the U.S. every year. Candidates ignore the inarguable connection between more than doubling employment-based immigrant admissions from 400,000 in 1994 to more than one million in 2014 and today’s high unemployment. In the first quarter of 2014, 17 million fewer working-age Americans had jobs than during the same period in 2000. Also from the BLS: since the start of the Second Great Depression, the U.S. added 2.3 million "foreign-born" workers to the labor pool compared to just 727,000 native-born.
These are immigration and job market statistics that have a direct bearing on the well-being of every American. Yet most average voters are kept in the dark and are unlikely to become more well-informed unless presidential candidates tell the whole employment story. Honesty should be the cornerstone of every political campaign. Instead, platforms often contain half-truths and outright deceptions.
Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. Contact him at [email protected]