Student Debt FAQ

"It's not like they told us it would be."

Why is student debt a problem? Can’t students just work their way through school?

The average student now leaves college with more than $25,000 in debt and enters a labor market where jobs are scarce and the average annual earnings of workers ages 25 to 34 with Bachelors degrees have fallen by 15% since 1990. Heavily indebted students must put off purchasing homes, starting families and opening new businesses in order to pay off student loans. This means student debt not only stops graduates from pursuing their life goals, but it also depresses the economy and thus keeps unemployed people out of badly needed jobs!

What caused the explosion in student indebtedness?

Long-term disinvestment in public higher education has placed the burden of funding college education on students and their families. Since 1980, state governments have cut their funding of higher education by forty per cent in real terms. Because household incomes have stagnated over the past two decades, students and their families have turned to student loans to cover the costs of higher education. Since 1990 these costs have skyrocketed, with tuition and fees at four-year public colleges and universities rising by 112.5 percent.

What happens if I default on my student debt?

Defaulting on student debt can have devastating financial consequences that last for decades. Student debt cannot be discharged through the standard bankruptcy process like most other forms of personal debt. Thus, student debt stays with you for life and even with your estate after you die! To collect on a defaulted student loan, private lenders and the federal government rely on a variety on invasive measures: wage garnishment (up to 15% of disposable pay), the interception of tax refunds, and withholding of future Social Security payments. Fear of default and draconian collection tactics forces many of the 37 million Americans with student debt to take low wage jobs to start immediately making payments. Crushing student debt combined with low-wage jobs means indebted students have little disposable income to spend, further depressing the economy.

What can we do about it?

Demand free higher education for all. College tuition is free in most other industrialized countries and there is no reason U.S. students should be subjected to years of crushing debt for a college degree. We need a social movement that can stand up to the powerful corporate interests who reap huge profits from the current system. Total annual public college and university tuition comes to $80 billion a year; our “defense” budget is $800 billion. This movement must demand meaningful but realistic policy reform that puts us on the course toward universal free higher education. President Obama’s Income Based Repayment Plan allows some students to discharge federally guaranteed debt incurred since 2007 by paying 10% of their discretionary income for 20 years. This is not good enough. Democratic Socialists of America’s Drop Debt! Campaign demands an additional presidential executive order that:

  • Expands the program to all student debtors
  • Allows student loans to be repaid at an annual rate of 10% of discretionary income over a maximum 10 years
  • Expands the program to cover all public and private loans

New Member Call, June 24

June 24, 2018

9pm ET/8 CT/7 MT/6 PT

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You've joined DSA - Great! Now register for this New Member Orientation call and find out more about our politics and our vision. And, most importantly, how you can become involved.

Questions or Comments? Contact: 

Sam M


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**Note: this page originally had the wrong date listed. The Correct date is Sunday the 24th**

M4A Chapter Activist Training Call: How to Pass a Medicare for All City Council Resolution

June 30, 2018

Saturday June 30th at 4pm ET/3pm CT/2pm MT/1pm PST

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In March, Philadelphia DSA members showed up in droves with healthcare workers, community members, and elected leaders to pass a Philadelphia city-wide resolution supporting the Medicare for All Act of 2017 and affirming universal access to healthcare as a human right. This victory showed that in a city where the poverty rate is over 26%, city council leaders learned where to stand when it comes to universal healthcare. To move a national campaign to win Medicare for All, we need to build support from a broad range of cities and municipalities across the country. With some research, planning, and lobbying, you could work with city council members to pass a resolution of support in your city too!

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