“When you get in debt you become a slave” -Andrew Jackson
Recently student loan debt has reached $1 trillion. This is an unfathomable amount of money to saddle the future of this country with. This is more than all of the credit card debt in the country. Except with credit card debt, if things get too bad, you can just file for bankruptcy and it will go away. Meanwhile, with student loan debt even bankruptcy will not free you from shackles of student loans. This is simply inexcusable. We consistently emphasize the importance of higher education in rebuilding our economy, but then create policies that continue to drive its price to a level well beyond anything that can be afforded without taking on massive debt. This is detrimental to our future and cannot be allowed to continue for a number of reasons.
The threat of debt makes higher education inaccessible for many. A recent Georgetown study, indicated that 70 percent of jobs will require some sort of post-secondary education. Sadly, many of those needed workers are being discouraged from pursuing a higher education in favor of remaining debt-free. Furthermore, every step up the educational ladder raises the risk and debt these students will face. When achieving one’s full potential to contribute to the economy is measured not by ability but how behind one is willing to get financially, it does not bode well for the development of society.
Debt saddled college graduates are limited in their ability to contribute to the economy. If I had managed to graduate college debt-free, there are a lot of things I would have done with the money currently going to paying back student loans. Most of which, would probably involve buying more goods. It’s no wonder we are facing a housing crisis in this country. When a large percentage of the next generation of workers are dumping money into paying off their education, there is a little left for purchases like a home or even a car in many cases. Ideally, we would live in an economy where the purchasing power of the populace was not so vital to prosperity. However, until that day arrives, having a bunch of recent college graduates with money to directly inject into the economy is an excellent thing.
Debt discourages experimentation and innovation. Peter Thiel, cofounder of Paypal recently offered twenty individuals under the age of twenty, $100,000 to forgo college in favor of starting a business. Most people are not faced with such a drastic choice as this. However, when one leaves college plagued by debt, taking the risks needed to stimulate the economy is not the most appealing proposition. Instead of pursuing further education, or taking out a business loan to start the next fortune 500 company, many college graduates are struggling just to find a job. Leading many to either settle for a low-skilled job that helps pay the bills, or in many cases, being forced to move in with parents or other family members while continuing a seemingly fruitless job search. This lack of success, damages the confidence of many, further reducing the willingness to take the chances needed to stimulate the economy.
The increase in student debt shows little signs of slowing. In fact, as governments attempt to balance the budget on the backs of students, both through decreased funding for public higher education, and reductions in state and federal grant programs, it only seems to be getting worse. However, this does not need to continue. Rededicating ourselves to preparing the future workforce of this country through investment in our higher education institutions and the grant programs that allow students to afford the educations they provide can reverse this trend. This will require courageous leadership and sacrifice from the elite minority that controls the money and power in this country. Or maybe we should just let the market solve the problem. That always seems to work…