The Student Debt Crisis

It started with the space race. In 1957 the Soviets launched Sputnik, Earth’s first artificial satellite which
sent the US government into a frenzy, launching the National Defense Education Act of 1958. Within a
decade, the number of students in college doubled giving America’s future generation a chance to take the
lead in any future scientific endeavors.


However, that initiative quickly went south when hundreds of thousands of college students worldwide
began to find themselves in crippling debt. Currently, over $1.5 trillion is owed in student debt to the US.
Increasing college tuition is the more obvious reason as to why people are owing increasingly more and
more money every year.


In the past, getting a college degree was considered a luxury. People could enter the job market with just
a high school diploma and have a comfortable life. However, that’s no longer the case, and universities
know that. It’s now becoming increasingly more difficult to get a high paying job with even just a
bachelor’s degree. Because of this, the competition in our society when it comes to getting into college is
fierce. All the top schools are looking at the same pool of high achieving students, but many of them also
look at income to make sure they’re able to pay for their education. And in order to entice students to go
to their schools, they make sure to build many amenities such as parks and gyms, which all add to the
rising tuition.
Image result for supply demand colleges
While many schools have gotten better about offering financial aid and being “need-blind” in their
admissions, because the costs are so high even students receiving financial aid may find themselves in
debt.


So what happens when you begin to try and repay that debt?
Loan servicing companies are the ones responsible for managing your money and setting you up on the
right repayment track. However, these companies have increasingly become part of the problem in the
sense that they have been cheating their customers. While most of these companies are guilty, one
particular company, Navient, has received more complaints than others. They have been accused of
double charging their customers, overcharging veterans, etc. These companies are also known for their
bad customer service. An ex-employee at Navient explained that they were highly encouraged to keep
their calls to 7 minutes or less, and at times even had company-wide competitions to see who could talk
to the most clients in a day. When it comes to issues of explaining complicated loans, they would then
instead recommend a different kind of loan just for the purpose of saving their time and dealing with
more customers, therefore making more money.

Bottom line is, because so many millennials are in crippling debt over student loans, they are postponing
starting a family and getting a house. All their money is going towards paying off debts instead of going
into different markets to keep up the economy. In a country that prioritizes education, we sure don’t make
it easy to get it.

https://www.forbes.com/sites/investor/2018/11/08/how-student-debt-is-destroying-the-economy-and-how-
we-can-stop-it-in-its-tracks/#7b5d9c926619
https://www.youtube.com/watch?v=t0CyBv18A5k
https://www.forbes.com/sites/zackfriedman/2018/10/08/navient-lawsuit-student-loan-forgiveness/

Comments

  1. AnonymousApril 7, 2019 at 12:30 PM

    It's really interesting to see how this has changed over time and how it's affected majority of the community because people are used to having just their high school degree but now, with so many people going to college, one needs a higher education. There is a big positive in this because it means more of our society is more educated and qualified for jobs, but there is the clear downside that some people end up spending their life in debt because they come fresh out of college with debt.

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