Editorial: Student loans are the new mortgage
The changing demographics of the Pennsylvania Legislature are going to do more than increase Harrisburg’s social media presence and a demand for avocado toast.
They are producing a whole new perspective on debt, and it’s an important view to understand as we move forward.
We might pine for the old days, but we have to plan for the new ones, and the change in how we spend and borrow money, and why we borrow it, is dramatically different compared to decades past.
The National Conference of State Legislators says the average age of the people who represent Americans in their state capitols is 56. That means they graduated from college about 1985.
The average college tuition at that point was about $3,000. The average home was $82,500, and household income was about $30,000.
Today, the average annual cost of attendance (a figure that includes all of the fees and costs that aren’t specifically tuition, many of which didn’t exist 34 years ago) is $28,150 for a public school. Average home price is $173,300, and household income $59,195.
Income has almost doubled. Home prices are up just a bit more than that. College costs 10 times as much.
College also costs more over a longer time. In 2014, U.S. News and World Report showed student loans planned to take 10 years to pay off ended up taking 21 years, meaning a bachelor’s degree could take longer to finance than a 15-year mortgage — and parents could still be paying student loans when their kids leave for college.
State Sen. Lindsey Williams, 36, just took office and has made student debt a priority, co-sponsoring a bill that calls for the state to refinance Pennsylvania student debt through the issue of up to $1 billion in bonds.
Tribune-Review readers have responded to this, many opposed to the state acting like Mom and Dad, taking out a parent loan to cover a kid’s bills. You decided to go to school, some say. Decide to pay your way! That’s fair.
But regardless of the virtues or vices of this bill, younger legislators such as Williams lend an important voice to the discussion as Harrisburg continues to spend money on all kinds of programs, borrowing funds and committing us to long-term debt with no end in sight.
We talk a lot about government and politicians mortgaging our kids’ futures. Williams and her generation can speak to a simple fact. It’s not the mortgage you have to worry about. It’s the student loan that really bites you.