Losing Interest in Student Loans

Student loans are impeding the financial freedom of millions of Americans upon their entry into the adult world and far beyond. It’s a heartbreaking reality, with a depth and scale many fail to fully grasp. 

Student loans — and debt more generally — have become a fixture of American society. The pressure to secure higher education combined with soaring tuition costs leave many young Americans feeling they have no choice but to borrow. 

Today, 70% of students who receive a bachelor’s degree hold debt by the time they graduate, according to the Urban Institute.

Throughout childhood, Americans without affluent parents are often primed to fall into debt as soon as they come of age. The glaring absence of financial literacy education, the derisive tone directed at those who don’t attend college and the pervasive message student loan debt is manageable and harmless combine to make American children ripe for the squeeze of unfeeling and predatory financial institutions.

These unfortunate realities have resulted in a $1.74 trillion cloud of student debt looming over the heads of 43 million Americans, according to NerdWallet. On average, it takes borrowers 20 years to repay their debt. These payments are often thought of in isolation, but the money from these two decades of payments could instead be used to start a family, buy a home or take entrepreneurial risks. 

Student loan forgiveness is the most commonly discussed solution to mass debt, but it seems more like a shiny object politicians kick around to avoid addressing the root of the problem. 

Focusing only on forgiveness offers temporary relief, but doesn’t address the deeper issues of rising tuition costs. What we really need is comprehensive reform.

We must ensure future generations aren’t trapped in the same cycle of debt which has left so many seeking forgiveness. To do so, we must first understand how we got here.

What began in the 1960s as a noble effort to make college education more accessible to Americans has become a profit-driven industry. 

The rise of private lenders in the 1980s created a market where financial institutions profited from student loans — often at the expense of borrowers. Meanwhile, the widespread availability of these loans has played a significant role in enabling the artificial inflation of tuition costs, pushing the average price of a bachelor’s degree well into the six-figure range. 

At the heart of this crisis is the public’s willingness to tolerate financial exploitation in the name of education. Universities have increased the cost of tuition far beyond what is reasonable, and they’ve found young Americans will take on debt to cover whatever arbitrary number they set.

Loyola has not been immune to this trend. The Phoenix previously reported a tuition increase of 8.5% in just the past two years.

We, as students, have forgotten we’re in a negotiation with universities — and we’ve surrendered our leverage. 

There’s a deeply-ingrained belief in American culture that college education is a prerequisite for a good life, driving people to make extreme financial sacrifices to earn a degree. If students could muster the courage to collectively call universities’ bluffs, tuition costs would drop precipitously.

I must admit, this is a tall task. 

It would require a widespread shift in cultural attitudes regarding education and personal finance. We need to prioritize financial literacy, empowering individuals to make knowledgeable decisions. We need to challenge the comfort with the accrual of debt, emphasizing it’s something to be seriously wary of.

Perhaps most importantly, we need to present, create and value alternatives to college education. Universities’ stranglehold on the perceived market for what so-called successful people do after graduating high school allows academic institutions to collectively engage in monopolistic practices. 

If there was a legitimate alternative to higher education, market forces could take effect, prompting universities to lower their tuition costs.

Student loan forgiveness and government-imposed tuition caps would be wonderful, but we can’t afford to wait or rely on them. What we must now do is reclaim our agency. 

Students need to recognize they’re being walked down the primrose path toward a life of debt, and respond by taking a breath and charting a better course.