College is more expensive—and important—than ever before. Some 44 million Americans collectively hold nearly $1.6 trillion in student debt. And these numbers are growing. This decade alone, college costs increased by 25% and student debt increased by 107%. Today, college graduates earn 80% more than those with just a high school diploma. That dichotomy is putting students in a difficult situation: Do they risk going into crippling debt at the beginning of their adult lives in the hope the investment turns into a career financial stability that goes with it?
Some 44 million Americans collectively hold over $1.6 trillion in student debt. And these numbers are growing.
At the same time, advancements in technology, especially automation, are making it harder to earn a living wage without some type of advanced degree. Today, college graduates earn 80% more than those with just a high school diploma, on average.
College is more expensive — and important — than ever before. And that dichotomy puts students in a difficult situation: do they risk going into debt they can’t pay back or miss out on the benefits of a college degree?
Experts have long labeled this dynamic a “crisis.” But then, another kind of crisis hit: the coronavirus pandemic. And then, an economic crisis followed.
In February, the United States officially entered an economic recession and between mid-march and June, over 42.6 million Americans filed for unemployment.
During the 2008 recession, many opted to go back to school and gain new skills. However, since then, the cost of a four-year college degree increased by 25% and student debt increased by 107% and many are less sure if college will be the solution to riding out a recession this time around.
CNBC Make It spoke with students, borrowers, historians and experts to learn how student debt became a crisis, how the pandemic will impact borrowers and who is to blame for putting students in an impossible position.
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How U.S. Student Debt Became A $1.6 Trillion Crisis
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Joe biden can cancel my school loan. But he can't buy my vote. Will not be voting for joe biden. My vote is not for sale old joe.
I am certain if people were taught personal finance in middle school the student loan crisis would shrink dramatically. People just don’t understand that choices matter, a loan is a debt, and school choice matter.
We should start a program of Paid Federal Internships for Student Debtors. Pay is fixed at $25K/yr off the loan balance and salary= E-1 (the lowest enlisted rank in the military, currently $21,996/yr) with mandatory dorm style housing (four-person suites in converted federal buildings.) Every Federal government unit must have a program of internships. Match is first by completed degree to unit; for example NFS would take all forestry majors, USGS would get geology majors, etc. and then at random. This would allow even non-graduates (some 40% of debtors) to participate. One million jobs, the first 500,000 jobs are in departments and other units, the second 500,000 jobs are service programs. Nurses Across America would provide 100,000 nursing graduates their first jobs in underserved rural America. Teaching Literacy would provide 100,000 extra reading teachers to public schools with failing literacy rates to allow beginning readers to learn reading in small groups. Public Music would provide 25,000 music graduates to perform classical music in public spaces at airports, train stations and Federal government buildings. An Environmental Action Corp would provide 250,000 workers on current environmental disasters (Asian carp, plastic in oceans, wildfire remediation and climate change.) Technical school graduates could be added later.
In the USA the minimum legal age for drinking is 21, yet at the age of 17 you are allowed to
* make a choice of what your career path will be
* take a credit that will put you in debt for decades to come or even for life
I think that the education system just like any other system in the USA (healthcare, incarceration etc.) is geared towards exploiting people as much as possible. After finishing university you will usually have several tens of thousands of debt under your belt. For years now the speed at which jobs and job requirements change leads to the every growing massive problem that many people are already facing – the education that they get is not applicable to the real world. Add to that the insane inflation in the USA due to the government printing money without coverage and the huge public debt of the country itself and you get a very dire situation, where young people are forced to pick poorly paid jobs just to scrape by. I am not a financial expert but a proper credit system should ensure that the loaned money is paid in a timely manner in order to ensure that the creditor doesn't go broke. Now, as we all know those almost 2 trillion USD are not going to be paid off…ever. Therefore, we need to look for the clues who is the beneficiary in all that – large corporations and the government itself.
One may argue here that there those bright minds that will work hard and will achieve the American dream. However, the number of those people is getting smaller by the second. So you end up with fewer insanely rich people and a whole lot of mouths to feed. And those mouths will soon be replaced by AI in many sectors leading to massive layoffs (already happening) and people loosing their homes (if they have any, since that in itself is a miracle nowadays given the real estate prices).
No wonder that the government is trying to apply more control and pressure via law enforcement, media and local governments.
billionaires are always looking for new and cool ways to give back and help people, they could help people out a lot with student loans too.
90% guaranteed by government. Banks don’t care if you pay or graduate. Loan to anybody
Don't forget to blame others!
Affirmative action education is worthless? How is this fair to those that paid? Oh, right…not fair to responsible people. Look at who doesn't pay…
Id say 90% of my friends have over 100k in student debt and none of them are even using their degrees at the moment.. Not to mention when you graduate HS they dont tell you that most degrees are useless unless you're going to school for a lawyer or medical etc… Most employers would rather higher someone with experience over someone with a degree because they can pay them less. To me college is a scam.. You wouldn't give an 18 year old a 100k business loan or personal loan yet they give them a college loan without blinking.. Dont even get me started on the interest people dont realize when its all said and done.
If you're gonna go to college atleast do your homework in terms of what you can actually make when you graduate…
Many fallacies in this analysis.
Why does everything always happens when Regan is mentioned?
DONT Go to school unless you have a major that pays something after like nursing, engineering or pre-med.. Problem solved..
I almost couldn’t go to school because I didn’t have a co-signer. I went to a state school I graduated with a bachelor's Degree in Psych and I make 50k but have to pay 850 a month for my student loan payments. I am 80k in debt and at this point I wish I didn’t go. Some days I go hungry because I’m living paycheck to paycheck
You go to the university but you don't understand the power you are signing on… I thought people were playing ignorant for years and tried to get some free money from the rest of us. The fact now is that you were not playing and you don't know how the basic economy works. Your parents failed you, badly.
USA schooling system is just fuuugggged
In the US, the politicians…primarily the Democrat party…have figured out they can make empty promises about many things, including student loans, but fix nothing. This makes and keeps people perpetually dependent on them, big government.
It certainly doesn't help that the government made student loan debt literally the only form of debt that is completely nondischargeable by bankruptcy. Seriously. Think about that. Remember Enron? Enron got to declare bankruptcy. I don't want to hear boomer moralists who could reasonably pay off college with a part-time job lecturing ANYBODY about the morality of not paying back your debts. We make allowances for convicted business felons that we will not make for students. This system is intentionally designed to disincentivize higher education and create a more precarious and volatile workforce.
What they're not talking about is the insane interest rates for student loans that make it so much harder to pay into the principle. There needs to be required financial literacy/life courses in high school so that kids understand what they're getting into when signing for these loans.
The students got this on themselves. Unfortunately they're also the future of the country. So are you going to let them drown because of their mistakes or are you going to save them and in that process save yourself. It's a simple question.
Yes, most of them are free loaders, irresponsible people. But if you do nothing, they'll keep being that way.
So… all in all, just don't be born in America and you are all good, you guys want to know my student loan here in Romania ? IT"S 0 !, that's how much i have to pay ! nada.
I payed off my loan with precious metals then bought petrol with more precious metals to give the power to one god of freemasonary for the individual not the oligarchy of elite
Honestly they are just making bad decisions. Go to a college you can afford. I went to a community college for FREE and anyone who graduates a California high school can do that. Then I went to a state school and worked to pay my loans as I was going to school while they were 0% interest. When I graduated I had 3,000 in loans which I paid in 6 months. The problem is people with no financial resources want to live the dream and go to expensive schools. Stay in your lane. If you broke go the cheap route don’t be stupid. Work and after you’ve been working for a while spend more $ on your Masters. It’s common sense. But I guess that’s not common
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