Going to college is supposed to be a part of achieving the American Dream, right? In recent years, this type of thinking may be challenged by the continuous increase in student loan debt. At present, Americans owe more than $1.3 trillion in student loan debt. Upon completing their education, the students find themselves faced with exorbitant loan payments not long after. In addition to this, when first obtaining employment, the individual is beginning in an entry-level position whose salary sometimes forces them to take on part-time employment just to make ends meet. At this point, the American Dream has turned into a nightmare. Why? Here are a few facts to consider:
- Student loan debt exceeded credit debt in 2010,
- Student loan debt exceeded auto loans in 2011,
- Average student loan debt increased from 50% of college students at the bachelor’s level owing a little more than $10,000 in 1994 to more than more than 66% of college graduates owing approximately $35,000 in 2016.
What is going on here? How do we address this concern? The simple answer could be to encourage individuals to refrain from applying for federal student loans. Some may suggest applying for grants. Others may suggest applying for scholarships. However, everyone does not qualify for these sources of financial aid automatically.
In addition, when the individual is living in a low income family scenario, or a single parent home, the options may appear to be few at the time of considering higher education. Many families have to contend with the fact that total household income levels have not been able to keep up the pace with the costs of attending college. Even in a time wherein it seems as though the economy has rebounded from the Great Recession in certain sectors, there has not been much of an impact on those living at lower socioeconomic levels. With the increase in the cost to attend college and the rising interest rates, it becomes difficult to determine how to best make this dream become a reality.
Today, more than 42 million Americans are indebted to a more than $140 billion private industry that has been empowered by laws enacted by Congress over the past few decades. While this private industry is increasing its revenues, the American people are defaulting on loans and are unable to plan effectively for their financial future. Facing their future with such uncertainty adds to the level of stress already being experienced. Some people have even lost all hope of being free from the financial burden and being inundated with phone calls from collection agencies.
How can the American people be freed from this nightmare? In my opinion, the nation’s lawmakers need to revisit some of these legislative measures and find alternative solutions. The federal government also needs to stop offering a dream filled with health and prosperity that turns into a nightmare of overwhelming waves of distress and poverty once the clock strikes midnight. When it comes to addressing student loan debt, there remains much to be discussed in both public and private sectors, on the federal and state levels of government, and in the educational institutions as well.
Sean Mungin, author of “The Thorn In The Flesh”