Hey you! Why aren’t you buying a house? Or a car? Or a diamond? Why aren’t you getting married? Or starting a family? Or moving out of your parents’ basement?
Young adults just finishing up college and starting their careers tend to be the subject of ridicule. Previous generations blame our love of avocado toast and brunch for our apparent apathy toward taking the steps young adults are “supposed” to take.
What they don’t understand is that many of us would love to buy a house or start a family—if we weren’t buried in student loan debt
A Future On Hold
The average student leaves college with a diploma and a mountain of debt. In the graduating class of 2015, two out of three students faced around $30,000 in student loans.
Debt that massive isn’t just an inconvenience—it’s a cloud that hangs over your life for decades. Over half of young adults said they’ve put off a major life decision because of student debt.
Big loan payments month after month make it hard for young adults to save up for the future. In an already tough job market, some graduates have had to turn down jobs in their field because they wouldn’t be able to make ends meet.
Some loans allow for deferment or income-based repayments, but that just means graduates live with their student loan debt even longer. Carrying that much debt can make it nearly impossible to get a loan to buy a house or car.
The Federal Loan Business
Over 90 percent of student loans come from one of the federal government’s many loan programs. Instead of helping truly needy students afford college, student loans have ballooned into a massive government program.
During the 2014-2015 school year, the federal government loaned out over $95 billion. Just thirty years ago, students borrowed less than $5 billion.
A Blank Check For School Administrations
The federal government thinks their loans are helping make college more affordable for students. Instead, they’ve created a vicious cycle of increased tuition rates followed by unpayable student debt.
Federal loan programs are tied to the “cost of college attendance,” and unsurprisingly, tuition has skyrocketed. The cost of a degree has doubled since the ‘90s, thanks in large part to student loans. A 2015 study found every dollar the government pays out in subsidized student loans causes tuition to increase by 58 cents.
Student loans are great for school administrators. They can jack up prices and use the tuition dollars to, say, hire hundreds of thousands of other non-teaching staffers, give themselves raises or build lazy rivers. But in doing so, administrators are taking advantage of students who’ve been told their whole lives college is the key to a better life.
Fixing the Problem
Unless the federal government implements reforms, school will continue to get more expensive, and students will be encouraged to take on more and more debt.
The federal government should stop using the cost of college to determine how much money students can borrow, taking away administrators’ incentive to raise tuition. In addition, the many federal loan programs should be consolidated into one needs-based program.
It’s time to stop forcing students to mortgage their future in order to get a good education.