In his 1931 book, The Epic of America, James Truslow Adams defined the American dream as “that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement” (LOC). For many, a college education appeared as a pathway to this life; where not only plentiful job opportunities existed, but economic growth promised a lucrative career. Now, however, the tables have turned. Instead of a college education paving the way to a better life, many college graduates are experiencing crippling loan debt after graduation, causing many to wonder if a diploma in one’s hands is even worth the hard work and financial stress.
According to Forbes, two-thirds of students graduating from American colleges and universities are graduating with some level of debt. For me, school has always been guaranteed. My parents value education and started a college fund for me when I was just a baby. I had it easy compared to the thousands of students with soaring amounts of student loan debt. I can’t help but feel guilty when I talk to my friends, who get no help from their parents, yet are expected to begin pay back on $20,000+ in loans only six months after graduation. For many, this deadline is impossible. According to a survey from Citizens Financial Group, 23 percent of college graduates said they are unable to make payments on their loans; 43 percent have entered deferment; and just 8 percent have refinanced their loans (US News).
Unsurprisingly, few changes are being made to the higher education financial landscape. According to MarketWatch, the outstanding balance of the nation’s student loans is growing by an estimated $2,726.27 every second, making the Class of 2015 the most indebted class ever, with an average of $35,000 in loan debt. To put that number in perspective, even when adjusted for inflation, it’s still more than twice the amount borrowers had to pay back two decades ago (Wall Street Journal).
Thanks to increases in tuition, students’ ability to pay for college without taking out loans has become increasingly difficult. From the 1983–1984 enrollment year to the 2013–2014 enrollment year, the inflation-adjusted cost of a four-year education increased 125.7 percent for private school and 129.0 percent for public school (EPI). However, tuition costs are not the only factor affecting graduates’ ability to pay off their college loans. Despite having better job prospects than the classes of 2009-2014, the Class of 2015 faces critical economic challenges, as evidenced by rising levels of unemployed and underemployed college graduates. Over the next 10 to 15 years, Class of 2015 graduates will earn less than if they had graduated when job opportunities were plentiful (EPI).
Fortunately, public figures recognize the flaws of the college education system and continue the conversation about debilitating student loan debt. Sen. Elizabeth Warren, D-Mass. proposed a bill in 2014 that would allow borrowers to refinance their old loans at current, lower interest rates. Although Senate Republicans blocked a vote on the bill twice, Warren said she will continue to pursue the legislation. Without bills like Warren’s, “refinancing options for student loans are slim” (US News). Likewise, democratic presidential hopefuls, Bernie Sanders and Hillary Clinton, have laid out plans to help reform higher education so that it is more accessible to all.
For some college graduates, the name of their employer could drastically affect the amount of debt they hold, as well at the length of time needed to pay it all off. As of this month, companies such as PricewaterhouseCoopers, Natixis Global Asset Management and Fidelity Investments offer a new perk for the indebted millennial workforce: assistance in paying down student loans. According to a study by NerdWallet, graduates “could shave off nearly three years of payments and have $4,100 cut in interest from what they owe” by taking advantage of the newly announced perk (CS Monitor).
The biggest move to directly correct student loan debt was made by Northwestern University this month. The goal of the plan is for students who qualify for financial aid to no longer have to borrow to pay for their education. Overall, freshmen who would normally take out loans to pay for a semester at the prestigious school will instead receive a combination of grants and scholarships to cover their expenses. According to Northwestern University spokesman, Alan Cubbage, “current undergraduate students who already have $20,000 or more in loans will have that debt capped starting next fall, and receive a scholarship instead of having to borrow more” (Chicago Tribune).
If every higher level education institution followed this plan, and if every company offered an employer contribution program, thousands of college graduates would envision a life of financial stability and happiness, instead of years paying bills paycheck-to-paycheck, unable to enjoy the benefits of having a full-time career that was achieved after years of studying, stress and self-discovery.
Students striving to make a life for themselves don’t deserve to have thousands of dollars of debt sitting on their shoulders after spending 4+ years working their a**es off. Sure, students with loan debt may eventually find a job that pays them enough to break even, but how long are these tired, stressed out college graduates supposed to wait to achieve the American Dream? Afterall, “it’s important to understand what your pathway is going forward. College is not just this experience that everyone needs to do that is sort of magical and is the golden ticket. College should be the pathway going forward” (KNPR).
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