The Lighthouse | Black Girl Projects readers might’ve noticed the recent Twitter/People Magazine/ABC News post about a Daily Beast editor and freelance writer who managed to pay off a whopping $102,000 school loan by buckling down and paying more than her monthly loan minimums.
Editor Mandy Velez apparently beat her ungodly debt into submission by taking “up eight types of side hustles while working a full-time job.”
One “Forbes” writer praised the woman’s ability to exploit the “gig economy,” explaining Velez “did social media consulting, freelance writing, took paid surveys, walked dogs, cat sat, babysat, did background television work, and even earned money as a mystery shopper.”
The media would have you believe Velez’s $300 minimum monthly loan payment is something that can be pushed through, so long as you’re young and determined and willing to yank yourself up by your bootstraps and get to work. The reality of the matter, though, is that pulling yourself up by your bootstraps is something that only happens in cartoons and that not every college graduate has access to the kind of advantages Velez had.
For starters, Velez spent almost the entirety of her adult life staying with friends, roommates and later with a boyfriend. That always helps. But Velez also lives in Princeton, NJ, which has a median household income of $116,875 a year. Does wealth and location have an impact on your ability to deal with bills? Probably. There’s no mention of whether or not she owned a car, but public transportation isn’t often an option in rural or Southern territories, so many graduates have no choice but to saddle themselves with the costly gas bills, monthly payments, insurance costs and upkeep of owning a car.
“Forbes” would also have you believe it’s easy to surrender your free time and nightlife to paying off bills with side jobs and ignores the real-world issues of children, spouses, aging parents, and various dependents imposing themselves upon your evenings.
The far bigger matter nobody seems to be addressing in Velez’s articles or posts is the atrocity of exactly why this young woman was facing a home mortgage-worth of school debt, just as her career was starting out. Beginning your adult life $65,000 or more in the hole is a huge setback. A graduate facing $400 a month in school payments can’t easily get a mortgage. This means they can’t invest in a community or neighborhood, and may even be stuck living with parents or friends until they can make a dent in their monthly debt payouts.
The fact of the matter is Velez got hit with a massive tuition fee because her school decided it could get away with it. (Unlike your credit card bill and your car loan, you can’t file bankruptcy on your school loan.) Congress made sure of that in 1976 when it altered (pdf, page 61) the Higher Education Act of 1965 and mandated student loans be exempt from discharge in bankruptcy. Then they tightened the rules up even more by tweaking the Bankruptcy Amendments and Federal Judgeship Act of 1984 to include private loans backed by nonprofit institutions. Then, because they’re jerks, they splintered the six-year statute of limitations on the collection of defaulted loans, making you a 100-year target for collection agencies.
Not surprisingly, loan officers knew they could hand you any egregious loan you needed, because they knew you’d have no choice but to be good for it. Colleges then took that as a signal to cram you with the highest possible tuition and fees imaginable. In 1989, tuition for a full-time student at Jackson State University was less than $750 a semester. Today, that fee is $4,135, for 12 or more hours—a 451% increase.
Definitely not helping matters is the fact that the adults in Congress and in your state, legislature don’t care to increase state or federal contributions to universities and don’t really concern themselves with the debt you get saddled with. Louisiana State University President F. King Alexander, probably said it best when he testified before the U.S. Senate the decline of state appropriations was the “greatest challenge facing public higher education today.”
Kendra Bozarth, communications director for progressive think tank The Roosevelt Institute, said the situation is much worse for Black women, for race-related reasons.
“Structural racism and gender discrimination hold Black women back not only in school but also on the job,” Bozarth told Lighthouse. “Black families—already disadvantaged by generational wealth disparities—have to rely more heavily on student debt to get to school, and then they’re faced with an unequal labor market where employers have outsized power to set the terms, including when it comes to worker pay.
The one-two punch of school costs and low career return means school debt is gobbling up significantly more household revenue. In fact, the average head of household under 40 now spends more every month on loan payments than most families get to spend on groceries.
Suggestions are out there on how to reduce some of the damage, but most of them come with nasty caveats.
Sandy Baum, a nonresident fellow of the Urban Institute’s Education Policy Program, advises students to attend college as soon as possible, because late-comers get slapped with expensive adult-life problems fairly quickly and must borrow money to deal with them. That’s not easy, though, if family bills and prior debt is forcing you to delay registration. She also warned against taking longer to graduate, which is also not easy advice for some minoritized groups to follow, if their low-income pushes them into hiatus.
Baum warned that oppressed groups tend to more frequently resort to for-profit schools and should absolutely buck that trend and aim for public institutions or community colleges, but her additional warning to avoid non-public HBCUs is a bitter pill to swallow because of the benefits of the diverse perspective and refreshing change of culture that HBCUs bring to the table. Non-public HBCUs—like most any non-public college—can be very expensive. They offer fewer grants to students, which should conceivably put them out of reach of savvy low-income students looking to avoid high loans.
Other finance counselors warn students to avoid liberal degrees, due to high costs and low economic returns, and to aim for careers in health- or STEM-related fields, which guarantee a higher income. This suggestion also comes with a bad taste, however, because it ensures only wealthy students will be able to pursue liberal arts-related careers.
Bozarth said students should not have to choose between following their dreams and crushing debt.
“Suggestions (to avoid HBCUs and limit yourself to medical or STEM careers) underscore the fact that our society views problems like student debt as an individual problem when, in fact, it’s a systemic one,” Bozarth told Lighthouse. “A key way for Black women to avoid being crushed by America’s $1.6 trillion student debt crisis is for policymakers to recognize and explicitly address structural racism in higher education and in our economy more broadly; to explore ways to undo the concentration of economic and political power in the workplace; and to get on board with big ideas like a public option for higher education, which would make public colleges accessible and equitable for everyone.”