Student loans have been a problem for a while, but we are now in the midst of a full-blown student loan crisis. College students are graduating with massive debts. 69% of the class of 2018 took out student loans, and they graduated with an average of $29,800 in student loans. This doesn’t include the loans the parents of those students took out. All over, students are entering the workplace with debts ranging from the price of a small car to debts that are essentially mortgages. Large sums of money they could never secure a conventional loan, and for good reason. But unlike conventional loans, the vast majority of student loans are guaranteed by the federal government and difficult to discharge even under bankruptcy.
So, this begs the question: Why do we continue to enable and in some cases encourage students to take out student loans?
As a high school senior and college freshman you are bombarded with the horror stories of students who took out credit cards and ended up running up debts. Colleges do a pretty good job of discouraging students from opening credit cards, but the damage done by using up your $300 credit limit on your first Gap card pales in comparison to the damage that can be done by a student loan. That’s true for both individual students and nationally as student loan debt eclipses total US credit card debt by billions.
If we are comfortable telling students they shouldn’t open credit cards, we should be equally comfortable cautioning them about student loans.
Some people have already begun to cry foul on the student loan system. Obviously, some of them do this from a place of privilege. It is far easier to condemn student loans if you yourself didn’t need one. However, that doesn’t make the message wrong, and contrary to popular belief most people don’t need student loans. There are affordable college options and ways to pay for these options. Community colleges, work-study, and military options are not explored enough. Working through school is not only a way to help pay for school but a valuable experience for the real world. Paying for school out of pocket depending on how long you or your parents have been saving may mean forgoing your “dream-school” or full-time student status, but we need to let people know that’s okay. When, where, and how someone goes to school should be largely a financial decision as it will likely be one of the most expensive purchases they will ever make.
This, of course, won’t apply to every single student. There are obviously millions of fiscally responsible people who took out manageable loans and paid them back. However, for every one of them, there are a few that wished they hadn’t.
The student loan crisis didn’t happen overnight and despite the hopes and dreams of millions of debtors, it won’t disappear overnight either. However, that doesn’t mean we shouldn’t work towards changing the culture. That starts with encouraging students to make fiscally responsible decisions. We often use the term real-world to describe life after college. Tell that to the millions of people in the workplace paying real money for decisions they made during college.