Students as Producers of New Wealth
This week, Pew Social and Demographic Trends released A Record One-in-Five Households Now Owe Student Loan Debt. The Pew report does a good deed by situating student loan servitude “in the context of the debtor household’s other debts, assets and other measures of economic ability to handle the student debt” (p. 5). The study is based on government data from the Survey of Consumer Finances (SCF), “a triennial survey of the financial characteristics of U.S. households sponsored by the Board of Governors of the Federal Reserve with the cooperation of the U.S. Department of the Treasury ” (p.5). One of the most revealing findings by Pew:
While every income group had more total student loan debt in 2010 than in 2007, the increases were greatest at the two extremes of the income distribution—households in the lowest fifth of households by annual income and in the highest fifth—than in the middle three-fifths. (p.2)
Because outstanding student debt has been rising and household incomes have been falling since 2007, outstanding educational debt has risen as a share of household income for all. (p.2-3)
Carl Davidson has an interesting perspective on student loan debt, one that is worth sharing in relation to the dismal numbers contextualized by Pew. Mr. Davidson, interviewed June 4, 2012 on The Progressive Radio Show by The Progressive‘s editor Matthew Rothschild, discussed student loan debt and the need for free public education. Davidson believes a free college education “is very much in the American tradition” as evidenced by the GI Bill that assisted millions of U.S. servicmen and women in pursuing their education. Around 5:40 into the interview, Mr. Davidson proposes that we collectively reconceive student debt in way that emphasizes intellect, knowledge production, and sharing of ideas as elements of social investment:
But somewhere along the line we started seeing students as consumers of wealth rather than as producers of new wealth. My view is that students are producers of new wealth mainly in the their own skills, their own human and social capital, and the country should subsidize it. You can make students pay something, small amount, more or less..
Davidson and Rothschild see the “new wealth” movement as a critical part of Occupy Wall Street; one need only look at student stories of debt servitude reported at Occupy Student Debt and Occupy Colleges to understand that further reform of the student loan repayment system is required. I’d only add to the Davidson-Rothschild discussion that adjunct and contingent faculty also create new wealth, often in spite of their working conditions. As such, this population must not be ignored in student loan debt discussions. Perhaps Pew’s next step is a study on the adjunct and contingent population?