As I was sitting at home on Saturday morning, flipping through the TV channels, I came across Education Sector’s Kevin Carey on C-SPAN’s Washington Journal. Now, I’m not sure what his main topic was – as I said, I stumbled on him whilst channel surfing – but just as I tuned in he seemed to be offering a stale but unchallenged argument: College student debt is too high, and we know this because there’s no way on his salary a new teacher could comfortably afford to make his monthly debt payments.
Intuitively, my reaction to this all-too-common refrain was “hogwash.” But then, being properly skeptical about all things, including my own knee-jerk reactions, I thought I’d best test out the proposition that a new graduate saddled with an average student debt load couldn’t possibly afford to become a public school teacher.
To run my test, I sketched a rough expense estimate for a new graduate who will be starting off as a first-year teacher in Indianapolis, Indiana, a city I thought seemed like “average” America.
So what would his expenses likely be? Below is a basic list, with bases for estimates:
Monthly Loan Payment: $300. (The State PIRG’s Higher Education Project reports that for a new graduate with $20,000 in debt – roughly the average for a new graduate who has taken out a loan – that must be paid back in 10 years at a 6.8 percent interest, the monthly payment would be $230. For the sake of a “fudge factor,” I boosted the payment to $300.)
Rent: $650 (This is from CNNMoney.com. It turns out rent in Indianapolis is relatively cheap. However, rents are likely at least partially reflective of overall lower living costs, which would in turn be reflected in salaries, evening this out.)
Food: $200 (I just guesstimated this based on my own food expenditures, and then added a bit on the off-chance I eat less than the average recent graduate.)
Transportation: $120 (My notional teacher is both living and working in Indianapolis so I didn’t figure he’d have too great a commute. I estimated that he’d fill his tank up about once a week at $30 a pop.)
Auto Insurance: $90 (Young Mr. Chips drives a 2001 Corolla and has a pretty good driving record. Allstate’s quote estimator reported that this would be close to his monthly premium.)
Renters Insurance: $20 (I got this quote through State Farm. Actually, their quote for an 800 square-foot apartment, about $40,000 worth of stuff, and $100,000 in personal liability was $16.50 per month.)
Clothing/Laundry: $100 (I guesstimated this too. I don’t buy a lot of clothes, but thought it might be a reasonable amount.)
So what’s our recently minted grad’s grand monthly total for all these essentials and student loans? $1480.
Now, let’s see if a first-year teacher working for the Indianapolis Public Schools (IPS) could afford such a load on their initial salary. Looking at the salary schedule for IPS teachers, one finds that our fresh graduate heading right into teaching will earn – get ready – an annual salary of $34,638, or a monthly salary of $2,887!
At this point I shouldn’t even have to do the math to see my test’s results, but let’s make this formal: If we subtract our new teacher’s monthly expenses from his monthly salary, we find that he has $1,407 left over! That’s right, almost half of the young man’s salary remains after paying off his monthly loan charge and all of his major expenses. That is a lot of beer money! (Or, I suppose, money he could save.)
Of course, there are expenses missing from this calculation – taxes, for one – but there are also major income boosters missing. After all, most teachers only teach for about ten months, and many get temporary jobs to fill the time. That means their teaching salary is generally not their only income. And I didn’t mention such major benefits as the generous loan forgiveness programs for which many teachers qualify.
Now, maybe I’ve overlooked some big expense, or grossly underestimated something, or my example isn’t representative of the financial challenges facing the average first-year teacher. If none of those things are the case, though, then there’s only one possible conclusion that can be drawn about the “student debt is too high and teachers’ salaries are too low” argument: It is utter hogwash, and ought never, ever, to be repeated again.
I’m not holding my breath.