"I Am Suffocating Under a Pile of Student Loan Debt"
by Janalan Tomita, 6/16/2015
Student loan debt is now the largest contributor to our country’s overall debt burden. The total amount of student loan debt is now more than $1.2 trillion, and on average, students graduate with $30,000 of debt, which can take 20 years or more to pay off.
In a few weeks, I will obtain my degree from the University of California, Irvine and officially begin repaying my student loans. As this burden becomes all too real, several questions arise: Can I afford to take an internship when repayment on my student loans will soon begin? How can I make enough to afford the everyday cost of living and make my student loan payments on time? Should I go to graduate school, knowing I will only increase my student loan debt? A generation ago, college graduates thought about buying a house or starting a business. Now they have to organize the next 20 years of their lives around paying off massive amounts of debt.
I currently owe an estimated $70,000. If I decide to attend law school, that $70,000 will easily triple. It is difficult to qualify for financial aid due to the middle-class status that my family enjoys. Some critics might say that attending community college for the first two years is a more affordable option that more students should explore, but doing so would mean losing out on two years of friendships, collaborative networking, and other benefits that a four-year college or university brings to students.
As a citizen and a financial contributor to this country, shouldn’t I be afforded the ability to attend a four-year public university without worrying about accumulating overwhelming amounts of debt? As a country that prides itself on the American dream shouldn’t the United States ensure that student loan debt doesn't overburden and overwhelm graduating students and prevent them from realizing the promises of this great nation?
I am deeply troubled by the loss of livelihood and welfare that my classmates and I will face because of our large debt burdens.
This is only one story, and there are many others who are in similar or worse situations than what I have described.
University of California, Santa Cruz (UCSC):
John is a transfer student and a graduating senior at UCSC with $30,000 in student loan debt. He is frustrated to have so much debt when he attended community college for his first two years of higher education.
John feels that the problem with student loan debt stems from the Free Application for Federal Student Aid (FAFSA) system. In order to qualify for federal student aid, students must fill out the FAFSA annually, which includes multiple sections regarding one’s background information. John was offered little financial aid because of his father’s high income. However, John’s father believes that after children turn 18, they are on their own. Thus, John has no financial help from his family to pay for college. He is also disappointed that the public University of California System has tripled tuition in the last ten years. Without financial support from his family, John will be burdened with significant monthly student loan payments for many years and will have to forego opportunities to increase his financial security and improve his quality of life. He has essentially been shut out of the American dream.
University of California, Los Angeles (UCLA):
Sarah is a graduating senior at UCLA with approximately $22,000 in student loan debt, despite receiving a significant number of grants as an undergraduate student. Sarah is the first in her family to attend college, which means that she and her family had no experience with student loans. She hopes to work full-time this summer in order to pay off some of the interest she has already accrued. Once she begins law school, her federal loans will be deferred until she completes her degree, but Sarah estimates that her debt will greatly increase because there are fewer grants available for law students. In order to save money while pursuing her advanced degree, Sarah plans to move back in with her parents.
University of California, Riverside (UCR):
Alice is a graduating senior at UCR with $31,000 in student loan debt. She is not planning to attend graduate school right away because she wants to work and pay off some of her debt. She lives frugally by renting the cheapest housing and buying all of her goods from thrift stores and discount stores. She is also in charge of paying for her own medical care, general living expenses, transportation, and travel. Though she was able cover her tuition and rent with financial aid, she still accumulated debt through living expenses and educational programs. Since she was unfamiliar with the student loan process, she and her family were unaware that her student loans would need to be paid back with interest.
University of California, San Diego (UCSD):
As an out-of-state student, Sean will graduate with $160,000 of student loan debt. It frustrates him that he must pay additional fees simply because he is not a California resident. He believes that public universities should make it easier to qualify for in-state residency, and state governments should invest in higher education. Also, he thinks that administrative salaries should be capped, and cities should focus on increasing the amount of affordable housing and public transportation available to students. Sean hopes that more Pell Grants, which are federal grants that do not need to be repaid, will be available to students in the future. He expects to spend a couple decades repaying his debt.
Student debt affects all of us.
The student loan debt crisis does not merely concern students, however; it affects everyone. People in my generation are less likely to buy houses and cars, get married and start families, and work in the public and nonprofit sectors that serve our communities. We cannot afford mortgages, insurance, and saving for retirement. The student loan debt we incur keeps us from fully participating in the economy we worked so hard to become a part of, and it forces us to defer the very things that defined being a responsible, successful member of society in previous generations.
According to the researchers of a 2015 study by the University of South Carolina and University of California, Los Angeles, those with student loan debt had higher levels of depression. This study, among others, reveals how student loan debt relates to our ability to function as members of society. These factors could lead to unstable relationships and a decrease in the health of future generations, adding one more pressure to an already shrinking middle class.
Some policymakers have worked to address the student debt problem, but we need more comprehensive and effective solutions.
The Obama administration has created programs that give some relief to student loan borrowers. Officials have introduced an array of programs for paying back student loans, such as the Pay As You Earn (PAYE) Repayment Plan, the Income-Based Repayment (IBR) Plan, and the Income-Contingent Repayment (ICR) Plan. Each of these programs is useful because they allow students to reduce the monthly amount they pay on their loans. Other programs focus on forgiving student loans in exchange for public service, including Teacher Loan Forgiveness, Public Service Loan Forgiveness, and the Perkins Loan Cancellation and Discharge Program.
While these programs are helpful to students with surmounting debt, they are only short-term solutions for long-term problems. Despite the positive aspects of these programs, until the debt is actually extinguished, student borrowers continue to lose out on all sorts of opportunities. There are some signs of hope. Two of the leading advocates in addressing the student loan debt are Sen. Elizabeth Warren (D-MA) and Sen. Bernie Sanders (I-VT). Each has introduced a bill in the current Congress to combat the student debt crisis.
Warren’s bill, the Bank on Students Emergency Loan Refinancing Act (S. 793), would help students refinance the unpaid principal, accrued unpaid interest, and late charges on their Federal Direct Loans. However, this legislation would not address the size of student loan payments, which often rival or even exceed payments on a car or a house, or the higher education tuition spikes that cause the amount of student loan debt to skyrocket.
A more promising approach was recently offered by Sanders in his bill, the College for All Act (S. 1373). This bill would eliminate undergraduate college tuition at all public colleges and universities, decrease interest rates by 50 percent, enable the refinancing of student loans (much like mortgages), increase the availability of work-study programs, and simplify the financial aid application. Since the federal government bailed out the big banks during the 2008 financial crisis, Sanders believes it is time for the big banks to give back by helping to underwrite these proposed programs. His bill would do this with a small tax on Wall Street transactions. The legislation also looks into the high costs of college itself.
There are many factors and obstacles that must be addressed in order to resolve the student loan crisis and the challenges it places on millennials. Most public universities have drastically increased tuition over the years, and this is not just a state issue. If public universities receive federal funding, they should be required to take steps to make the cost of college affordable.
Together, we must recognize that student loan debt and the ever-increasing cost of higher education is not a concern of the few, but a worry for the many. At a time when the U.S. trails most other nations in literacy, math skills, and reading comprehension, we can ill-afford to price people out of an education beyond high school. The choice is ours: we can control higher education costs and help those already suffering under them, or we can stand by and watch our middle class continue to be decimated.