STUDY NOW, PAY FOREVER:
The Growing Struggle of Students Burdened by Student Debt
January 23, 2020 | PBAT MAGAZINE
By Yingying Chen, Diego Leon & Honglin Zhang
“I’ve been paying since I was 19. I am now 34 and I’ll probably keep paying for 10 to 20 more years,” responded Ms. Jillian Leedy, the Flushing International High School Media Arts Teacher, as she sat in the tiny college office of the school, with its walls filled with banners and flags, advertising colleges from around the state and country.
Jillian shared her story and experience of what it is like paying for college and dealing with loan payments. She showed us her loan amounts, for undergraduate and graduate school, amounting to almost $46,000. Furthermore, she told us how because of her mom getting sick, a lot of the money they had went to her mom’s medical bills. On top of that she did not get much financial aid when she filled out the FAFSA (Free Application for Federal Student Aid) because their family income was high on paper, but in reality aid could have been extremely helpful.
Jillian is just one case, out of 44 million people in America today dealing with student debt. People wanting to pursue higher education deal with the necessity of taking out a loan in order to be able to invest for their future. And after obtaining it many wonder at what cost, as they face payments with high interest rates on enormous amounts of debt right after graduating, and even during school.
Often times the pressure to pay back the loans hold back graduates from chasing their goals and making life decisions because not paying means the amount of debt grows and grows. And postponing the payment makes it even larger. With the weight of such payments on student loan debtors’ shoulders making efforts to step up their careers or meet financial goals becomes even harder. If they’re lucky they get into the fields they studied for. Others don’t get so lucky, and it’s okay to work jobs outside one’s field of study. But as just starting salaries aren’t enough to keep up with the costly monthly payments that often consist mostly on the interest of the loan. And many end up paying for many years, wondering if they’re ever going to finish.
Moreover, if these loans go on default it brings the payers with a lot more problems. Among some of these are; Getting a job, since there are employers who check the credit score of who they’re hiring, and defaulting on your loan means that your credit score will be affected more and more as time goes by. Financial Aid received to go back to school for higher degrees, because a loan going on default will make the person ineligible for future financial aid, as if keeping up with payments wasn’t enough struggle already.
As high-school seniors, learning about what a big problem this has become in America is scary. It makes us, and many of our peers worry about what the future awaits us. The costs of college are increasing every year, and with state funding for higher education decreases, along with the expenses of institutions increasing over the years, this results on the cost of attending college to increase as well.
FIHS Seniors Apply to College, 2019
The graph below, from the Center on Budget and Policy Priorities, shows how much per-student funding has been cut in all states except for California, Hawaii, Wyoming, & North Dakota. This is concerning, and it’s also showing that those who can, among our community, should advocate for the government to prioritize education along with supporting those who are really trying to fight back against this issue. Higher education is more important than ever and everyone should have the opportunity to obtain it and afford it without worrying they’ll be paying for many years.
This has become a critical issue for the country, and it must be dealt with for the sake of ensuring the future of millions of young people and their families. Not only the future of young Americans but also of the many families that immigrate to the United States trying to ensure a better future for their young ones.
Cost for a College Education
The price of college is rising, America is the country with the third most expensive college tuition prices (You can check it for yourself on this page looking up the name of any institution you want).
Experian Federal Reserve
On average, the cost of an undergraduate degree increased roughly 161% since 1987. This data graph shows the rate of the increase 1987 to 2017. People can’t get too far without a college education, and being so important they got no choice but to look for a way to afford it. As expensive as it is they are forced to take on too much debt which harms their future. For some institutions it has even become completely unaffordable for some. Loans are often the way to go for students that aren’t among the few that receive full grants. Students end up in debt; Debt greatly affects those who are burdened by it, affects their life decisions, and even affects the economy overall. In order to understand how this problem came to be, it’s important to understand how it started.
History of Student Debt in the U.S.
The student debt problem might seem like a recent thing, and while it is true that it is at its highest point ever; reaching $1.6 Trillion owed to the federal government and various private institutions in the first quarter of 2018. It is a problem that dates as far back as the late 1950’s. Lending students money for college has changed a lot over the years. Since the economy has evolved away from manual labor to more skill based labor, more and more students had trouble finding work after high-school without a higher education.
Since college tuition and fees increases year by year, student loans that students borrow are gradually increasing. To put it in perspective, the graph below shows how much on average the costs of higher education has increased from 1971 to 2019. As of 1971, the cost of attending a four-year public institution; Room and board, fees, and tuition included. Was below $9,000. Now, as of 2019 As the data graph above, it was recording the average education costs between year of 1971 and 2019, since 1971, higher education costs have increased 145%.
In addition to changes of student debt yearly, there is a big number of total federal student loan borrowers which is 43 million, which means as much as college tuition increases every year, college students should start to borrow college debt to have an education in college. There is also a huge number of total outstanding federal student loan debt, which is $1.6 trillion, which means college debt is a huge payment in college students’ life, it becomes a problem for college students who are from middle-class or lower-middle class families. Furthermore, Student loan make up the largest chunk of U.S. non-housing debt, it takes a big place in students life. It is approximately $1.6 trillion, which is higher than another loan that will be cost in students life, it is very costly.
We conducted a survey to analyze the possibility that people in our community of Flushing International High School have to deal with this issue in the future.
A total of 35 participants who are seniors at Flushing International H.S. The majority of them answered that they do plan to go to college, 80% to be exact. Which means there are many seniors who want to go to college, and even though a big chunk of the seniors that will graduate Flushing International receive a decent amount of financial aid in various ways that does not have to be repaid because not many come from high-income families. Many will need to find a way to pay for college because of not enough financial received, or deciding to pursue their higher education on an institution that is either costly or that doesn’t offer them as much aid.
Additionally, tuition is just one part of the cost of going to college. And those who decide to go away will have room and board on top of the already costly price. Many of the Flushing International seniors are making their decision almost entirely driven on the price of the institution. 79.4% of seniors who plan to go to college are worried about the tuition and additional costs that they will have to spend for college. Those questioning whether to go at all have pretty similar motives. Often afraid if making such a big investment is worth it and affordable for them and their families. If seniors decide to go to college, they should pay money for college costs, college cost has been increasing year by year, that is why there are many people have to borrow debt.
Even college costs are higher and higher, there are many students willing to go to college by borrowing and paying debt, there are also interest rate of college debt yearly, which means the debt that most students borrow are also higher, so college debt becomes an issue in the U.S.
Thus, borrowing college debt is one way to help students to pay for college, but there are many seniors who know nothing and a little, which shows how knowing and learning about college debt is important to seniors. However, the higher college costs will make those middle-class or lower-class families tired, they don’t have enough money to afford it. If college costs get higher and higher never ends, it will be absolutely affect where seniors want to go to college.
Education at What Cost?
The existence of college debt might help middle-class or lower-class families to get to college and pay for college, but it is too costly for students and families? FIHS college counselor Ms. Erin says, “financial assistance for students to get education in college is really necessary but it is not enough because of expensive tuitions.”
Firstly, people barely understand interest rates and how loans work when they take out the debt. For example, when we interviewed a student from Flushing International High School who called Michael. He did not really know the interest rates that he takes to pay off loans every month or year. Most students will sign without understanding. Furthermore, standard loan contracts will allow anyone who can’t pay to postpone for years but the amount grows.
Secondly, as the data graph above shows that the college tuitions increase year by year, but the salaries that people get does not increase at all, which means that the benefits of a college education is not what is envisioned by the students. In addition to statistics about how difficult it is to pay that much tuition, there are many different interviewees told us about their experiences and stories about college debt. A freshman who is from St. Joseph’s College in New York, she said that she studied in this college because this college offered her scholarship opportunities and her family could not afford too much money for paying her college. She thinks that to gain an education is exactly the right thing to do, but it is not worth it to pay that higher tuition to gain an education, education should be free or it should not be that much money.
Another student who studies in St. Joseph’s College, she also thinks that education should be free or should not be so expensive as it is. Many students borrow student loans to get the opportunity to attend college, there are different interest rates every year, and the money that students should pay are higher and higher because of the interest rate increases.
Similarly, Michael, a graduate of FIHS in 2018. Told us about his debt stories. He has scholarship so he doesn’t have to pay for tuition, but he still has to pay for room and board. Which costs $10,000, he receives $6,000 from the government, that he doesn’t have to pay back, but he still has to pay $4,000 and he has a student loan which is $3,000, the actual money he has to pay during these 4 years will be $2,000 a year with insurance of $1,000. This experience is kind of inspiring students to get scholarship for paying college but it still gives those students who don’t have too much money pressures.
In addition to what he said about debt, there is another former student who called Yi Chen, she also shares her experiences about debt, she said that there are two different types of loans that school will help us to decide and there is an interest rate that you should pay for loans, and your debt starts while you graduate from college and find a job. There is also an interviewee who named Larissa From AAFE said that she took out federal loans to pay for her bachelor’s, she had a gap of approximately $5000 from what her financial aid was giving her. She graduated with $20,000 in debt from her master’s degree. It took her 10 years to pay off loans which is very concerning.
As presidential elections approach, many of the candidates. Realizing what a big problem this has become, how it has affected many of the debtors so far, and the potential impact it can have in the economy for future generations. Have incorporated student loan debt relief or solutions of some sort in their proposals. Some of these are:
These Candidates aren’t the only ones addressing the problem of student loan debt. We can see that even though the proposals differ from candidate to candidate, most of them focus on making community college; And even four-year college, free. Lowering interest rates, the price of tuition, expanding public loan forgiveness as well as debt cancellation some based on income and some offered for everyone, eliminating the taxation on debt cancellation, simplifying services such as income-based plans, and limiting how lenders take advantage of debtors. Not all of these proposals may be beneficial debtors. For example, as seen above, one of President Trump’s proposals includes the removal of the Public Service Loan Forgiveness program which forgives a person’s loan balance after making 120 monthly payments working under employers that qualify, which would lead to less people working in public service as well as other government- linked jobs (The College Investor). Assuming that one of these candidates with the more optimistic proposals takes presidency and puts them to place. Student debt cancellation could be a great relieve for the big amount of people affected by it. It could be a boost for the economy as well as a new chapter in a better, more affordable education system in America. But many agree that forgiving student debt on a large scale could lead to problems as well. This is because of the fear that it could be a moral hazard that will only benefit just a generation of people, will make it unfair for people that invested a lot for their degrees for professions such as medicine in the case that the cancellation is income based. And that will lead to more borrowing without thinking of the consequences because borrowers will think that if it happened once it will happen again.
The Flushing International college advisor, Ms. Erin, made a really good point on this. Saying that “When people pay for something, they appreciate it more” comparing it to how often students in public schools don’t really take care of costly resources such as laptops and supplies, but when it did come out of their pockets people took really good care of it.
As tuition cost increases, so does student debt. Even though research has shown that lower-income students that borrow money for college have much smaller debt, they struggle and default much more on their loans. This is because lower-income students often have a big disadvantage of resources and guidance to prepare for college, apply to schools that are right for them, along with applying for financial aid, enroll and persist in their studies, and at last graduate.
This problem is part of the effects of the “achievement gap” which is the imbalance of how well academically, and how much education one group of students achieves over another. On this case it connects directly with the issue of student debt. Lower income students that require to the necessity of taking out a loan, might often have to work while in school, or else these students lack the resources to thrive in school and end up dropping out; Which is what really gets someone with student debt struggling.
Since college tuition is gradually increasing, student debt is also increasing. Paying off debt becomes an obstacle to students’ families who get lower income. Thus, to know and understand more knowledge about college debt is significant, to know how to get the fastest way to pay off the debt is necessary.
There are some organizations and programs that can help those students to pay off debt. Such as, College Possible, which is an organization that offers support to those students whose families get lower income to go to college successfully, and also help students to get ready to go to college, take them to visit colleges, help them to apply any financial aid and scholarship; Student loan forgiveness, which is the program that forgive or cancel student debt if students encounter some situations like school closure, death, permanent disability; FAFSA, TAP, which are financial aid that most seniors have applied before going to college; EOP, HEOP, which are financial aid that help students with their college costs based on family income. However, apply for a scholarship or financial aid is a complex process, it is critical for students whose families have lower income but desire to go to college.
To sum up, we’ve walked through how this problem came to be, how it affects people, and how threatening it can be to people today and future generations. We saw some individuals closely and how they’ve been personally affected by student debt. People who’ve had to run the extra mile to invest in their education and build better futures but even with this effort the struggle has remained.
Looking for solutions and aiming to help some overtime we saw the decisions the American government has made that have resulted in a much bigger problem that not having enough money to attend college. Also looking at the organizations that have been born and the solutions states have come up with to combat the issue, it is seen that this is not so hopeless after all. But still, we are looking at a trillion dollar problem. Furthermore, we wonder if the solutions promised by the rising candidates will be the way out of the burden.
America is a country that the rest of the world sees as the land of opportunity, young people are the future. But that future can be stuck and heavily challenged if education becomes unaffordable. By learning about the issue and ways to avoid it we benefit ourselves, but as citizens and members of society is our responsibility to support those who are struggling, and support ways to obtain a quality, affordable education. Either for ourselves, or for those who will come, education is a human right. And when we are educated we improve ourselves and the world around us. Today we might be one Trillion in student debt as a country, but with the right steps we can make one trillion in progress for the future generations to come, invest safely for a better future and for a better world.