The Middle Class is Enraged
On barely getting by in a strong economy
I have a story in this week’s issue and up online — sorry for the delay in posting this, just dealing with some minor things like moving across the country, contracting COVID and then giving it to my whole family (including beloved 97-year-old granny), developing random hives, and our car breaking down after making it from CA to NY. But we all seem to have made it out the other side (famous last words.) Here’s the piece:
This story came from a few editors noticing signs of rage among the millions of people trying to buy homes, pay for childcare, and generally get by while the costs of everything are soaring. My colleague Belinda and I set out on a journey to talk to dozens and dozens of people in the middle class, which we counted as people in the middle 60% of incomes, so $42,500 to $166,900 for a family of three. We found a lot of frustrated people, who pointed their anger at different things like Jeff Bezos, the government, and lazy young people. Their frustration has been building for years—since the Great Recession for the many younger people who graduated in 2007 or so and are still struggling—but seems to be reaching some sort of eruption with this year’s runaway inflation. “It can take some time for the economic tectonic pressure to build sufficiently—and now the volcano is erupting,” one expert told me.
The thing that stuck with me the most from this story, which I have reported on before, is the continued insanity of how many people owe so much in student loans. One of the women I talked to borrowed $22,624, has paid off $34,225, she still owes $43,304. A lot of the people who are cautious about the government forgiving student loans (can they even do that? who knows?) talk about the downsides of what will happen if we just wipe all this debt clean. Even more people will be able to buy houses, flooding an already-crowded real estate market. They’ll spend on things they’ve long desired (cars, appliances, maybe even have another baby) and that will drive inflation even further.
But on the flipside, how can we ask someone who just needed $22,000 to be the first person in their family to go to college, who took out loans at 18 with no idea what she was doing, to repay more than THREE TIMES what she borrowed? It seems insane. I haven’t seen any proposals to just have student borrowers pay back their principal and not interest and fees, but it would make sense to me. I’ve done some reporting about how many ways the servicers—the private companies who took over handling federal loans in 2010—messed up the loans, but if you want to read more on this, there are lots of stories, including:
—Servicers not letting people into a program where borrowers repay what debt they can based on their incomes
—For-profit schools who misled students on what their education would entail yet made billions from federal loans
—And here’s a good NYT boilerplate ‘the many ways the government and servicers have messed up’ story
Anyway, that was kind of a long student loan tangent, but go ahead and read our middle-class story. As someone who has written about middle class economic angst for decades, I have to say something feels different now. A random fact to pique your interest: Median household income has grown just 9% since 2001, but college tuition and fees are up 64% over the same time period, while out-of-pocket health care costs have nearly doubled.
Here’s the story again:
And here are some related stories I’ve written about this topic before:
—A pandemic look into the dismal world of private student loans (which Biden/the federal government could not forgive)
—A deep dive into why children born in the 1980s to a low-income family (in California in this case) had a better chance at doing better than their parents did than children born in the same region in the 2000s
Tell me what you think, and if you have any student loan insights, I’d love to hear them. I’ve been obsessed with this topic for awhile. And hey, don’t get COVID! It’s even less fun that you think it will be.