Most people have a hazy awareness that the Occupy Wall Street movement, which has now spread to cities and college campuses across the nation, is an expression of a growing dissatisfaction with and suspicion of the United States federal government. However, the vast majority of Americans don’t realize that the movement bears significant similarities to the Arab Spring pro-democracy demonstrations that swept the Middle East and North Africa earlier in the year. The greatest common factor is that the bulk of the protesters are disaffected and unemployed university students.
Crippling Student Loan Debt Driving Political Dissatisfaction
Student debt in the U.S. has now surpassed credit card debt and is estimated to total between $898 billion and $1 trillion. This means that upon graduation, most students are immediately $22,000-$28,000 in debt on average, with those who attended private institutions of higher learning facing even a greater financial burden. With unemployment hovering around 9.1 percent in spite of all government actions to stimulate the economy, this well-educated modern debtor class finds itself working in fast food chains or bagging groceries just to get by.
At that level of employment, most are completely incapable of making their loan payments. The White House has begun to outline a plan that would help the more than 1.6 million Americans who find themselves crippled by student loan debt. Among other aspects of the proposal, students would be able to consolidate their diverse loans into a single debt at a better interest rate.
The Protesters Want Student Loan Forgiveness
The protesters, however, say that easing the burden doesn’t address what caused the need for the loans in the first place: skyrocketing educational costs that are pricing more and more young Americans out of a college education. College costs have tripled over the last three decades, and from 2010 to 2011 alone shot up 8 percent. What many of the members of the Occupy movement really want is a more radical option, complete debt forgiveness that includes an immediate cessation of all payments.
While the chances that this solution will be implemented are next to nil, the fact that student loan consolidation and debt forgiveness are front and center in the national debate is telling. It illustrates that the level of anger and frustration has filtered down to an age group that, historically, has not been this politically involve since the anti-war protests of the 1960s.
The argument, however, is not without merit, in that it would return a significant amount of purchasing power to indebted students that would then re-enter the broader economy through greater purchasing power. Facebook pages and sites like ForgiveStudentLoanDebt.com that support this ideas are rapidly growing in popularity.
The Student Loan Debt Cycle is Vicious
The ForgiveStudentLoanDebt site was founded by a 37-year-old lawyer who graduated with $65,000 in debt. Unable to live and make his loan payments, he made an agreement called “forbearance” that staved off a default, but allowed interest on his loan debt to continue to build. Today, some 13 years later, and after resuming payments in 2004, that same man faces a debt of $88,000.
The Occupy movement has brought many issues to the forefront of public debate in the U.S., with student loan debt and the need for loan consolidation being central to that discussion. Certainly long-term debt in this country cannot be addressed when the youngest professionals in the nation literally have no chance to succeed financially, making a higher-education not an asset, but a life-long financial albatross.