How Can We? The Transformation of Student Loans

As of September of 2019, the national student debt nearly reached $1.6 trillion. Not only is this a crisis for the students and graduates themselves, an accumulation of debt this large is now a threat to our economy.

There are many causes that have contributed to the student loan debt crisis. For example, tuition prices of colleges and universities continue to rise. Many people are unable to completely pay for their education, and financial aid packages are not doing enough. Along with this, not many families are using and taking advantage of different college savings programs. Many college students do not have college as their only financial commitment that they have to see too, making student loans pile up and especially with interest, it is even more difficult to pay back. Finally, the entire financial aid and student loan system is lengthy, and confusing to many. Determining the cost of school and how quickly you can pay the loans back is often very difficult and the various steps to do so also doesn't help.

A fact of the matter is that not everyone is able to pay for a college tuition out of pocket. While this is true, we could also assume that these colleges and universities are businesses and large corporations who are always looking to make a profit, no matter the consequences. Tuition prices are climbing and show no signs of stopping.

There are a multitude of consequences to this student loan crisis. Colleges and universities are often only attended by the people who are privileged enough to afford the expensive price tag. With students taking out so much money in order to attend these institutions, their debt may affect them in the future. Along with this, certain borrowers are hit more greatly with the consequences than others. For minorities and women it is often more difficult for them to pay off their loans. More broadly, this crisis greatly affects the economy as well, impacting the housing and credit markets.

So, how can we solve the student debt crisis and control rising education costs for college students and graduates who are unable to afford their education otherwise?