The University of Southern California Should be Commended, notCriticized, for Tackling the Topic of Toxic Student Debt in America
By: Lisa Ansell, Associate Director of the USC Casden Institute
It is not easy for individuals, let alone institutions, to admit that they were wrong. After all, we know where the road paved with good intentions ultimately leads. Indeed, it is much harder to turn inward to reckon with the wrongs of the past and the unintended consequences of decisions made “for all the right reason” than it is to deflect blame on the various actors in the cast of characters who all played a role in creating what is now the American nightmare of student loan debt.
In their recent article, Beth Akers and Preston Cooper attempt to excoriate the University of Southern California for shining the spotlight on the 1.8 trillion-dollar student loan crisis while being complicit in its perpetuation and scope. While it is accurate to claim that USC is responsible for hefty volumes of student debt both at the undergraduate and graduate levels, this article lacks the nuanced view of the problem and in fact argues that “student debt isn’t exactly the evil that it is often made out to be.”
By recognizing their own culpability in contributing to this problem, The University of Southern California should be commended for the strides that it is taken to reduce student debt at the undergraduate level with the recent USC Affordability Initiative launched by President Carol Folt in February of 2020 whereby students who come from families with an annual income of $80K or less will attend USC tuition-free. However, equally as important as the tangible solutions to cut off the bleed of student debt is the recognition, by hosting docuseries such as “Scared to Debt”, to confront, rather than ignore a challenging topic. In other words, why is open discussion and even critique of institutions from within considered hypocritical?
In fact, the level of engagement and productivity of the first event on finding just solutions to the student debt crisis has prompted USC to host a second event in January of 2022 titled “Indentured Students: How Government-Guaranteed Loans Left Generations Drowning in College Debt” featuring Dr. Elizabeth Shermer, professor of History at Loyola University and author of the eponymous book which served as the foundation for this event along with a robust panel of academic and community leaders. Notably included on this panel is Jon Oberg, department of education insider whose testimony as a whistleblower against the nation’s largest student loan servicers, is featured in episode 2 of Scared to Debt.
A close read of Akers’ recent publications such as “Kill Public Service Loan Forgiveness and Pay Public Servants More” and “Busting Some Student Loan Myths” reveal a consistent argument against free college and student loan cancellation. Moreover, with claims such as “student debt isn’t an inescapable life sentence” and “the student loan crisis isn’t a product of a predatory lending industry”, Akers and her colleagues at the conservative American Enterprise Institute (AEI) essentially advocate for the perpetuation of a predatory lending system that has grown to monstrously unsustainable proportions, and now poses a true national threat.
Even before the pandemic, less than half of all borrowers were paying on the debt. Over 75% had increasing loan balances, and even the class of 2004 (who borrowed less than a third of what is borrowed today) have a default rate of 40%- twice the rate of sub-prime home mortgages. So while Akers and her colleagues argue strongly against loan cancellation, it is at this point inevitable that the loans will, ultimately be cancelled in broad swaths.
Speaking of Hypocrisy: why is a conservative think-tank like AEI, which consistently argues for smaller government, now defending a threatening, failing lending system that is owned and operated by the federal government? This is truly baffling. Neither Akers nor Cooper make any attempt to justify this most blatant philosophical inconsistency.
Also, noticeably absent from her various attempts to malign student debt forgiveness is any mention of the inexorable racial justice component of the student debt crisis that USC seeks to place at the center of these challenging discussions.
One can’t help but wonder if Akers has ever spoken to real people suffering from the realities of crippling student loan debt such as the inability to purchase a home, a car and even the decision not to have children because of their debt burdens. From the right-leaning ivory tower where the American Enterprise Institute sits, the view from above is so far removed from the reality on the ground that the chasm between policy creators and policy receivers is creating a permanent debtor class.
Yes, USC bears part of the blame in perpetuating a broken system that will collapse without serious reform in the very near future. However, it is through the willingness to reckon with our mistakes and to engage in conversations motivated by creating meaningful solutions that a light can be seen at the end of this very dark tunnel.
