One Woman’s $400,000 Student Debt And What We Should Do About It

One of the stories that may have gotten lost during the Thanksgiving weekend is this jaw-dropper: A Missouri woman who has managed to run up more than $410,000 in student debts.

Her story was published Friday in the New York Times, framed as a story of “how the federal government has become the biggest, nicest and meanest student lender in the world.”

A fair amount of the story is devoted to chronicling how it is relatively easy to obtain a succession of federal student loans. The story’s author, Kevin Carey, the education policy program director at New America, characterizes the federal student loan program much like a subprime lender in its willingness to make loans to people with little income or credit, only to become “a heartless loan collector” when the bill finally comes due. He reports that the subject of the story, Liz Kelley, was told that after a final forbearance period expires around the end of next year, the federal government “would ‘come after her,’ garnishing her wages and eventually her Social Security.”

While Kelley’s story is extreme, the story notes that “of the 43.3 million borrowers with outstanding federal student loans, 1.8 percent, or 779,000 people, owe $150,000 or more. And 346,000 owe more than $200,000.”

What the article could have added is that there are about 130,000 Social Security recipients from whom the federal government is deducting student loan payments – and that number is likely to grow dramatically higher. The issue was serious enough for Rep. Keith Ellison (D-Minn.) in October to call for an end to garnishing Social Security checks to collect federal student debts, a call that was bolstered by a petition campaign with more than 375,000 signatures.

While the article serves to highlight a serious problem with a compelling anecdote, it does a disservice by failing to highlight an obvious solution: Give people an alternative to the college debt spiral, and take people off the spiral who have already gotten trapped in it.

We should be pressing to make a debt-free public college option for every student who wants it – including adult learners who are trying to improve their skills and earning potential. And for people like Kelley, we should simply forgive their debt. There is no need for the federal government to profit off the choices people like Kelley made – especially when the result is less financial security and fewer viable career choices, the opposite of why she furthered her education in the first place.

It is for people like Kelley that we have created the “I Am a Student Debt Voter” campaign. Once you read Liz Kelley’s story, go to the site, get more information and buy a “student debt voter” T-shirt. Let the politicians and the news media know that we don’t have to settle for tinkering with the status quo on student debt, and we certainly shouldn’t merely gawk at people who through a combination of choices and bad luck end up in a hole of debt they will never climb out of.


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