As the third wave of stimuluses make their way to financially exasperated Americans, the nation stands at the apex of yet another existential crossroad. The question is: can it be systemically resolved beyond propositional promises for cementing permanence on how debt is viewed & ultimately addressed in America? To the average American, debt is a fact of life. There is simply no way around it. Whether college tuition, car buying, or home ownership, tremendous debt with appreciating interest looms on the inevitable horizon. Is private debt accumulation indicative of modernity? It is no secret. For the wealthiest nation in the world, the vast majority subside strictly on a paycheck-to-paycheck basis. All debt obligations aside, I cannot resist wondering: what impact will the debt culture have on future generations of Americans post-Coronavirus Pandemic?
Will it be remembered as a period of socio-economic amnesty through discontinuous albeit sporadic bailout that morphed into an epiphanous wake-up call on how interest submerged debt is ultimately addressed in America? Any affirmation implying the positive is unavoidably flanked by wishful thinking at a time of historic polarity & demographic inequality. It is a known worldwide fact; the United States is a nation driven by consumer debt culture. To be financially indebted is to be American! To suggest otherwise is sacrilegious to our Great American Experiment! Americans will incur & remain considerably in debt throughout most of their adult lives under appreciable predatory interest with minimal consideration afforded to debt forgiveness. Our American system is very much designed to favor the wealthy & individuals with socio-economic access.
This begs a fomenting curiosity: can the average American freely provide an informed definition of debt using a single sentence? Is all debt equal & comparatively similar in nature? As a nation, much of our financial survival hangs on a multilateral solution dedicated to the restructuring of citizen debt. Such a great undertaking must begin as a grassroots movement petitioning debt forgiveness for the most demographically challenged & vulnerable. It would cultivate national dialogue on how to rethink the ethical costs of debt under a refined existential morality. Any stride made in this direction faces this great question: what kind of debt should be forgiven & ultimately dissolved going forward for the benefit of the demographically qualified using socio-economic criteria?
The permanent elimination of student loan debt would be a great place to start. Student loans have transformed into a product devised, prepared, & ultimately sold by for profit loan sharks with heavily clouded exceptions between. Stimuluses in the form of debt forgiveness should not end with the pandemic. Verbosities turn prose fashioned as legal definitions for college financing make little to distinction between tuition & student loans. If home economics is to make a comeback in public schools, why not include a specific area of curriculum dedicated to debt management? It would begin by defining debt, explain how debt is incurred, & explore how to manage debt without “indebtitude” compromising quality of life. In America, the general expectation for recent high school graduates is to have a concrete roadmap of their adult life planned before entering college.
Yet, debt management is not taught to high school students. Like the disappearance of home economics from high school curriculums, debt is dismissed as an adulthood inevitability with no anticipation of reasonable ceilings only to be sensationalized by for-profit loan schemes. Is this not predatory of inexperienced youths specifically & demographically challenged communities struggling with functional economic literacy? A mandatory course on debt management focusing on tuition & student loans can equip new high school graduates with the necessary financial literacy to navigate the treacherous waters of student loan debt.
This can effectively serve as a foundational example on debt management generally. Before that is possible, high schoolers should lead the way through student civic organizations sponsored by their schools throughout every major metropolitan area in America. The University of Minnesota Twin Cities has taken the first stride by offering tuition free courses to households earning less than 50k per annually. What if Minneapolis High Schools partnered with the same initiative at the university to further expand on student loan debt elimination?
From a practical standpoint, such a hypothetical “Student Loan Debt Elimination Program” can be limited to the following criteria: graduates 5 years out of college without gainful employment, annual net income under 100k, & no ownership of equity turned wealth, such as real estate, exceeding $350,000 relative to original purchase fully forgiven for government backed student loans. The possibilities are indeed endless.