No matter how prestigious the institution or how photogenic the campus, when we consider the possibility of attending a university, the first question is always: “What is the cost?”
As the price of attending college soars far beyond any previous records, there are still ways for someone to pay for the cost of college in the short-term through loans. The issue emerges when graduates are forced to pay back student loan debt, which they often cannot afford to do, and they face a system that is unjustly stacked against them.
While taking out loans to pay for college is not all that different from taking out loans for a house or a car, there are certain limitations on student loan debt, such as not being able to file for bankruptcy, which are unfairly harming college graduates. To fix this problem, a new set of laws should be passed to protect anyone who wishes to attend a college they cannot afford.
The amount of student loan debt is rapidly increasing and beginning to grow out of control.
According to the Huffington Post, student loan debt has increased by more than 500 percent since 1999. At the same time, the number of Americans with student loan debt has risen to 40 million people, which is more than the entire population of Canada. If you think that you are safe from the impacts of student loan debt if you do not currently have or plan to have any debt in the future, think again. With more graduates stuck with unbearable sums of student loan debt, they are reluctant to make big purchases like buying cars and houses, and this has a noticeable impact on the national and global economies.
One prime example of this situation can be seen in research done by the One Wisconsin Institute, which estimates that the impact of student loan debt causes $6 billion of lost car sales each year.
But if this is such an important issue that affects our economy then surely measures are being taken to fix it, right?
The short answer is kind of.
Someone who defends the current student loans system would likely be quick to point out that, according to a study done by US News and World Reports, the rate at which colleges are giving financial aid is higher than ever before, but this is a misleading argument. While one might assume that students can pay off their loans faster if they receive more financial aid, the rate at which financial aid has grown is still less than the rate of tuition, causing students to actually have to pay more than previous students.
A defender of the current system might also point to the student loans administered by the federal government as an example of a successful system since there are various payment plans, students often do not have to begin paying off their loans until after college ends and graduates can work down their debt through jobs with the government.
This however neglects that congress has been trying to double the interest rates on public loans to 6.8 percent in recent years, and, according to the Congressional Budget Office, the government makes $50 billion of profit each year off student loans, $5 billion more a year than Exxon Mobile, the worlds most profitable company.
What needs to be done? It is pretty simple, make student loans easier to pay back.
One of the major changes that is needed is to make it possible for debtors to declare bankruptcy on their student loans. Under current federal law, it is nearly impossible for a person to declare bankruptcy on their student loan debt, and they are forced to keep going even when they cannot pay. Bankruptcy plays an important role in keeping our economy moving, and these debtors need to be able to declare bankruptcy before they cant return to buying cars and houses.
Finally, Congress simply needs to get rid of other ridiculous laws which unnecessarily hurt students. Laws such as ones which say that if a person dies before they can finish paying their student loan debt, then the debt can be transferred to another family member, and another which states that if someone cannot pay then they can lose their licenses to work and drive should have no place in our system.
Higher education must be available and feasible for all who wish to peruse it, and the broken student loan system counteracts these goals.