“I Owe My Soul To The Company Store”
I was never much of a country music fan, even while being raised in the lower middle class on a small farm in northern Indiana in the 1950s/1960s.
But this Tennessee Ernie Ford song always resonated with me,
“Sixteen Tons.” Written in 1947, Ford popularized it in 1955.
Here’s the chorus:
“You load 16 tons, what do you get?
Another day older and deeper in debt
St. Peter, don’t you call me ’cause I can’t go
I owe my soul to the company store.”
This was clearly a populist song, back in the days when I was probably a populist, as I wrote in an earlier blog, I Was Once a Populist.
This song is about coalminers who lowered themselves into the bowels of the earth everyday to mine and feed the country’s dependency on coal. It was a dirty, dark, dank, claustrophobic, life-shortening job. Still is. The miners were paid poorly, lived poorly, and died too young from lung disease, ever beholden to the mine owners. The mine owners also owned the company store. The miners got their weekly pay and then they bought from the company store what they needed to live, often on credit until the next paycheck. They owed their soul to the company store.
This is a modern day metaphor for what is happening today in our country with college graduates (and non-graduates) and their loan debt kryptonite . Instead of the company store, they owe their soul to the banks for most of the rest of their lives.
College tuition has risen 169% since 1980, averaging plus 42% per decade, while salaries for young adult graduates rose only 19% in real dollars. Forty-three million graduates and non-grads owe $1.7 trillion for an average of nearly $40,000.
My wife and I graduated from UCLA and USC in the early 1970s. I had the GI Bill, so even for me, USC, a private university, was affordable — tuition-wise. I also lived off campus. This year, USC tuition is $60,000. Room and board is another $17,000. Do the math — $308,000 for four years. Kryptonite.
Staying on this, I do not recall the USC tuition while I was there, but I thought I remembered around $75 per unit. So, sixteen units a semester, twice a year, would be around $2400 per year. Sure enough, I googled USC tuition history and it was around $2500 in the early 70s. Damn, I love the Internet. Someone convince me that, today, USC education is worth 24 times what it was worth when I graduated. Insanity.
My wife later went to Loyola Law School at night while working full-time. By then, I was working full-time. Our total student loan debt was $7,000, and we paid it off in a few years.
Our daughter graduated from the University of Santa Cruz in 2002 with $15,000 in debt. She assumed about 40% of her college expenses — we paid the rest. She then moved to France, near Geneva, married, and went back to school at the University of Geneva for her masters and PhD. She paid off her Santa Cruz loans in five years. The most she ever spent in a single year at the University of Geneva was $1,000.
There was talk during the 2020 presidential campaign about free junior college, including trade schools. I learned a few years ago that free trade school matters a lot to young Black men. Learn a trade and make a decent living. But even Biden walked away from that. But, there is this — the almighty Oz, I mean Senator Manchin, was against it, and it was dead in the water.
There was talk of forgiveness of the student loan debt, but even Biden has been tinkering around the edges, and is now on record that the amount will be much less than what was earlier bandied about — $50,000.
What I do not understand is this — politically, this is low hanging fruit. Biden is already in the tank with young people, for reasons I do not fully understand. But it is what it is. How many young votes are in those 43 million student loan debtors?
And that is just talking politics. Imagine the boost to the economy if 43 million get rid of a monthly student debt obligation. We’re talking home buying, furniture and kitchen appliance buying, the use of handymen, vacations, dining out, and on and on.
Color me baffled.
Of course, Republicans oppose forgiveness of any amount because they get that voting thing. It would be popular.
Some data points to ponder:
· Consumers ended 2021 with total debt of $15.6 trillion according to the Federal Reserve in New York.
· U.S. household debt increased by $1 trillion in 2021, the largest increase since the onset of the deep recession in 2007.
· Nearly ¾ of that debt is in mortgages, followed by college student loan debt, auto loans, and credit cards. I would have thought credit card debt would be second.
· 65% of graduates graduate with student debt. I would have thought that percentage would have been higher but I guess if you add up all of the scholarships and fill-in-the-blank checks from the higher income folks, it makes sense.
· The CARES ACT, beginning in 2020, offered student debt relief that affected an estimated 35 million borrowers. Interest rates on federal loans dropped to zero until the end of August of this year.
· Private loan borrowing constitutes 8.4% of the total student loan debt.
· If you are a senior citizen and default on your federal student loan, the government can garnish 15% of your social security.
· As of 2019, 3 million Americans over 60 still have student loan debt.
· 40% of students with student loan debt never graduated from college. That was a surprise statistic.
· 3.2 million owe more than $100,000. My niece owed over $100,000 when she finished her masters early this century.
Student loan debt is not an equal opportunity destroyer. According to the Brookings Institution, Black student loan borrowers owe an average of $25,000 more in student loan debt than White college borrowers, four years after graduation. Black college graduates owe an average of nearly $53,000. Today, the average White college graduate has over seven times more wealth than a Black college graduate.
(I do not have any comparative data for people of color, or Indian college grads.)
There are some embers of hope flickering. In New Mexico, college is now free. In California, tuition is free for in-state Indians. Let’s hope these embers light a wild fire. But do not look to any red states for such initiatives.
In the Letters section of the New York Times, readers responded to an Op-Ed by a woman “drowning in debt.” One reader wrote, “I borrowed $75,000 to pay for college and now I owe $149,000. I’m paying a 7.5 to 8 percent interest rate…I cannot retire because of these loans.”
There are thousands upon thousands of these stories.
Put this in your pipe and inhale it — if powerful Republicans have their way, schools will be privatized. If that happens, the debt for schooling, beginning in kindergarten will soar like a rocket, making the current $1.7 trillion seem like a trifle.
I have read a lot about college graduates who are dead set against loan forgiveness, and take the position that if I paid off my student loans, so should you, even if your debt grows, and even if it follows you into your social security and retirement years.
Selfishness is still the primary malady in our country. What’s in it for me — or, as I like to call it — the 3 Ms — me, mine and more.
Sadly this divide over loan forgiveness plants itself right into the divisiveness between rich and poor, left and right or red states and blue states — and between pro-BIPOC and anti-BIPOC. Convince me that there is not some racism at work here.
As a liberal, I remain a person doing whatever I can to lift all boats, and supporting what is good for the general welfare. My wife and I vote that way.
If the cost of college is up 169% since 1980, think what it is since the early 70s, when my wife and I matriculated. And as I wrote in an earlier blog, The 1980s—A Decade of Infamy, the cost of textbooks went through the roof in the early 80s.
How does that person, especially the 40% who never graduated, or the Black graduate, ever afford a home? How do they ever climb out of debt, even without a mortgage payment?
I just saw a chart that says it takes $39 dollars an hour to afford a two-bedroom home rental in California, where I live. No other state is higher. That equates to $81,120 a year.
You might ask, but doesn’t owning a home and having a mortgage increase a person’s debt? It does. But, I would bet that with the current inflation on home or apartment rentals (see above), that a monthly mortgage payment would be close to a trade-off. The difference would be that instead of pissing away money on a monthly rent, you now own a home where each month the principle is reduced and the house is probably increasing in value. Add to that a sense of self, let alone self worth. You not only have a place but you have a place in society. Home ownership does not in itself determine worth. But it sure helps self-esteem.
Here’s the deal, the powers that be don’t want you to climb out of debt. To paraphrase a song from “Snow White and the Seven Dwarfs,” “I owe, I owe, it’s off to work I go.” And like old Tennessee Ernie Ford sang, “Another day older and deeper in debt, St. Peter don’t you call me ’cause I can’t go, I owe my soul to the company store.”