The growing student loan problem and how to fix it
The increasing amount of student loan debt incurred by our youth is one of the major problems in our economy today. While the housing market and banks have grown stronger since the recession ten years ago, student loan debt has actually gotten worse.
How we got here
After the recession, stimulus packages, low-interest rates, and bailouts were able to create jobs and put people back on their feet. Young adults were encouraged to go to college to help the unemployment rate and strengthen the quality of job candidates entering the workforce. To be accepted to college, however, high schools felt pressure to pass students and increase graduation rates. Colleges and universities lowered admissions standards to get students in and tuition money flowing. This left students who are underprepared and unable to fund their education without the use of student loans.
According to the Federal Reserve, student loan debt totals over $1.5 trillion dollars. Once students graduate, they are faced with incredibly high debt balances and an education that may or may not help them get the quality of job necessary to be able to pay back the debts.
One possible solution to the increasing debt problem faced by young Americans is a debt forgiveness program. The government was able to bail out and forgive banks and corporations during the recession, it might be time to do the same for young adults living in poverty and unable to keep up with their student loan debt.
Our government may also be able to step in and require that more universities and colleges help fund students education and provide loans themselves. This would ensure admissions standards stay where they should be and would hold the institutions more responsible for the costs of education.
Apprenticeships are also a possible solution to reduce further debt. For those who are interested in careers that may not require a college education, young adults can get paid while learning a trade and enter their new career at a high paying level. Once they have entered the workforce, they can also attend college while working to obtain a degree without the need for student loans.
It should be everyone’s goal to have as many students as possible receive a proper education that is paid for responsibly. College or no college, young adults should be able to go on to have successful careers without mountains of debt.