By: Katelyn Williams
According to the Federal Reserve, the American population is currently burdened with an all-time high level of college debt. As of 2018, the total student loan debt across the country increased to 1.48 trillion dollars leaving recent college graduates weighed down with on average $37,172; per the 2016 graduating class. With student debt at an all-time high and an average starting salary of $48,127, the average college graduate between the ages of 20-30 will have a monthly payment of $351 over a ten-year period. More than 2 million student loan borrowers have a student loan debt greater than $100,000 and over 415,000 Americans are carrying student loan debt greater than $200,000, which would triple if not quadruple their average monthly payments over a ten-year repayment period. With these frightening statistics looming, it is no wonder students are forced to move home upon graduation.
Because these numbers steadily increasing from year to year, it is obvious that the cost of college is becoming a growing burden for incoming students. Attending college for many high school seniors seems like the natural progression in life, but where is the explanation of what life is going to look like after their four years are up and the loans begin knocking at their front door? As of 2017, the annual loan default payment is over 11.2%, meaning that for every 2 million students carrying student loan debt, over 224,000 students are unable to pay it back and end up defaulting. Despite this, the banks continue to lend out thousands of dollars to students who may or may not be able to pay. Unfortunately, this passes the liability onto the loan co-signers such as parents, grandparents, and/or family friends. If the banks continue to loan out money to students in such quantities, the student loan bubble could be destined to crash at some point, much similar to the housing market crash in 2008.
So what does this all mean? Who has the responsibility to alleviate this huge issue the United States is currently facing? College tuition is increasing at a rapid rate of 6-7% on average and wages are only rising at an annual rate of 2-3% on a good year. Should we be looking towards our politicians to change loan laws and crack down on colleges and their ability to continuously raise tuition? For instance, should they require the universities to pay property taxes on their buildings/campus where currently they are tax exempt as a non-profit organization, or should we be looking at the universities themselves to take on some of the responsibility by redistributing their budgets to focus on reducing college tuition rather than expanding the campus and building the latest and greatest amenities? Maybe having students complete a cost benefit analysis to decide if the education they will be receiving is worth the debt they would be taking on might be the next logical step. Whatever the result may be, as a nation we must decide if it is time to address this serious issue or continue to pretend that it does not exist. It is our responsibility to educate our future generation who has not yet accumulated large amounts student debt instead of providing the Taj Mahal of amenities to attract students and their families. To continue down this path could be looked upon as naïve and could surely be the cause of a future crisis to our economy.