OTHER VOICES: Student-loan debt is growing crisis
Students have it beaten into their heads that obtaining massive debt is the best way to achieve future success.
College attainment in the United States, therefore, is this perverse, vicious circle. More and more people take out more and more loans in pursuit of more and more degrees. And the economy is already noting the impact of a collective $1.5 trillion in student-loan debt among 44 million borrowers, as reported by Forbes.
The seriousness of the looming crisis, unfortunately, is going largely unnoticed, despite the eye-popping dollar figure and number of Americans – nearly 14 percent – this affects. Yet, it’s being downplayed as a story du jour about how the millennial generation is slowly killing another service industry.
And, more frustratingly, addressing the root causes – steadily increasing tuition rates, particularly at for-profit colleges, and companies’ profiteering off these loans – appear to be largely ignored.
The U.S. Department of Education, for instance, has taken its sweet time on appeals for those with outstanding debt who believe they were defrauded by for-profit colleges or filed a variety of other borrower defense claims. It’s almost as if the lenders are being protected at the expense of thousands of consumers who, in many cases, were sold a bill of goods instead of an education.
Conversely, some companies and organizations are attempting to stem the tide in small ways.
Take the BenefitEd program offered by Lincoln companies Nelnet and Ameritas, under which companies can redirect some of their employer contribution to employees’ 401(k) retirement accounts toward student-loan payments.
The national debt crunch is obviously not of these local companies’ making. But, coincidentally, their new product highlights one of the great incongruities of this ever-growing problem – the cost of obtaining a degree designed to steer people toward future financial assurance can rob them of that very future success.
This isn’t a call to waive or zero out all outstanding student loans or for widespread tuition-free college, as some candidates for elected office are again doing. A system as sprawling as this can’t be turned on its head overnight. That’s wildly impractical. But continued federal inaction carries steep costs.
More Americans are attending college and earning degrees. Accordingly, more Americans – an estimated 70 percent of college graduates leave school with some debt – than ever before are carrying an average of more than $28,000 in student-loan debt.
Put it all together, and America has a new No. 2 category for consumer debt, one that’s recently overtaken credit cards and auto loans. And that’s why our national problem with student-loan debt needs more than just attention; solutions are imperative.