As of this month, the accumulated federal student loan debt is more than $1.54 trillion.
As many of us know, taking on loans might have been a decision that was made relatively quickly and out of necessity. But for most of us — 45 million Americans in fact — student debt, which has soared in recent years and now outweighs auto loans and credit card debt, is a decision that may impact the rest of our lives.
The Crisis of My Generation
It wouldn’t be unreasonable to say that for Millennials and Gen Zers, student loan debt is the crisis of our generation.
You could even compare it to indentured servitude. In colonial America, indentured servitude involved an employee working or laboring for a period of time under an employer, usually to pay for the expense of their travel to America. The employee worked without pay, but was bound to the employer by a contract until their debt was paid off.
We’ve encouraged an entire generation to reinvent indentured servitude.
In the same way, through a lack of awareness about the very real financial risks student loans pose to young adults, we’ve encouraged an entire generation to reinvent indentured servitude. New college grads work for sometimes decades to simply pay off their loans to creditors and banks, and they’re bound by their debt to those parties. In fact, since the government took over student loans from private banks in 2010, student loan debt has simultaneously ballooned and become harder to pay off.
It's virtually impossible to escape student loan debt, even if you declare bankruptcy. This has left millions of students with no recourse to sometimes hundreds of thousands of dollars in debt. Their obligations discourage them from pursuing prospects they might otherwise consider. It’s all about the debt and paying it off, not about finding a rewarding or fulfilling career.
Can We Blame It All on the Students?
Student loans can negatively impact credit scores, mortgage rates, and even romantic relationships. We’re setting ourselves up for failure by signing promissory notes without reading the fine print, but was it our fault to begin with?
Yes and no.
The naïveté of youth aside, private banks, together with the federal government, have made it their bread and butter to sell loans to young, impressionable adults. And for all the talk would-be presidential candidates offer about loan forgiveness or new, reimagined programs to better serve students, they’ve done nothing to curtail the influence and buying power of universities.
Student loans can negatively impact credit scores, mortgage rates, and even romantic relationships.
In this way, the government, banks, and other private institutions have altogether revitalized indentured servitude. No one is interested in whether you can actually pay the loans back or not — all they care about is getting your name on the dotted line.
Let's Focus on Stopping the Problem, Not "Forgiving" It
For all of the discourse on how crippling and mismanaged the student loan crisis is, there’s relatively little discussion about steps to take in preventing it.
Preparation for college can and should start early. Taking Advanced Placement or dual enrollment courses in high school is a way of getting many required classes out of the way. It’s also a viable option to take required classes at local community colleges and transfer the credits, instead of paying more for them at a four-year university.
There’s also a common sense aspect of it, which seems to be largely neglected by those affected by student debt.
Take required classes at local community colleges and transfer the credits.
Let’s say you’re an undergraduate majoring in the liberal arts or humanities, but on a pre-law track. You may or may not have taken out loans for undergrad, but you’ll have to for law school, after which you’ve worked hard to find a place at a firm in a prestigious field. You’ve set yourself up for success and planned so that your income out of school sets you up in a comfortable place to pay off your debt accordingly, all of which you considered beforehand.
Compare that to a student who hasn’t done their research on loans, is obtaining a useless undergraduate degree, and/or has no real idea of how their career out of school should help them in paying off their debt. Or someone who accumulates, say, $100,000 in debt for their degree when they plan to enter a field where they can make $35k at most. It just doesn’t add up.
There’s also something to be said for the commodification of higher education. Any young adult will tell you the job market looks daunting for someone without a college degree. Even if we can’t afford it, we’ll do anything to get it. We’ve come to idolize higher ed for the supposed doors it opens, and we see our futures as useless without a college education. This only feeds the narrative that without higher education, we have no prospects.
We Don't Want To Admit the Real Problem
While it’s easy to place blame at the feet of predatory lending services or uneducated young adults, neither is solely responsible for the economic catastrophe that now confronts us.
For one thing, political gains to be made on the promises of better student loan management is useless without acknowledging the beneficial relationship between private entities and the government. Both stand to make money, either in principle balance or crushing interest, from students.
And then there are our new and recent college graduates, inarguably one of the most-well educated generations around. Taken in by the sway of higher education, they essentially sell their professional futures to the parties that will now control the rest of their financial futures — and their ability to buy cars, houses, and have families.
The blame should be shared equitably, that much is evident. What’s also clear is that this issue goes so far below the shallow, superficial level of what we’re told.