Student Loan Debt: A Crisis

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Student Loan Debt: A Crisis

Layla Loew, Writer

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As high schoolers come to the end of their last four years of free education, students tend to be unaware of massive loan debt that often goes hand in hand with the college experience.

According to a Forbes article, “Student Loan Debt Statistics in 2019: A $1.5 Trillion Crisis,” student loans are the highest ever recorded. Since 2008, the debt has increased over time resulting in the average student loan debt at public colleges around $25,550 which is, “25% higher today than it was in 2008.”

The severity of this situation is often brought up by parents and teachers when discussing college, but not everyone understands that “more than 44 million borrowers collectively owe $1.5 trillion in student loan debt in the U.S. alone.” Although the cost of an education might be worth it to some, a lot of students go into college with no clear plan for the future, essentially racking up debt for no reason.

Considering that some people have student loan debt for a large part of their lives, it is crucial to be knowledgeable about some of the negative effects of jumping straight into a four-year college. Although the exact number of years has been argued, the article, “Average Student Loan Debt in the U.S. 2019 Statistics,” states that it takes most people who have graduated with a four-year degree “an average of 19.7 years to pay off their loans.”

The cost of higher education and the debt that comes with it has “surpassed credit card debt and auto loan debt” over the last ten years, making a compelling argument for carefully planning out a future beyond high school graduation. Especially for those who intend to pay for college with their own money.

Many students just graduating high school often overlook the little details in borrowing student loans, which leads to an unnecessary amount of debt built up over the years. Some of these overlooked details include something called an variable-rate loan, which is a loan that has a fluctuating interest rate. This means that a person can spend a much larger amount of money than they intended to. The reason why students are getting into so much financial trouble is because a majority of them have been misinformed or simply not educated in how tricky loans can be.

 In the Investopedia article, “Fixed vs. Variable Rate: How to Make the Right Choice for Your Student Loans,” it states that “when you only qualify for unsubsidized federal student loans, your interest starts piling up immediately,” but with a subsidized federal loan, “the government pays your interest while you’re in school.” The difference is important, and during a stressful time of applying to colleges, teens can sometimes make the wrong decision.

It is crucial for young adults to be conscious of the realities of financial debt and the responsibility of managing loans. Student loan debt is one of the biggest threats to our economy, so it is something to keep in mind when selecting a particularly expensive college. A well thought out plan for the future could make a big difference in the long run.