The Student Loan Time Bomb

By: Daniel Nardini

Lawndale News Chicago's Bilingual Newspaper - CommentaryHere is a sobering piece of information. As of now, student loan debt now costs the United States one trillion dollars. In other words, the more students who take out student loans, the higher this single debt will be. This figure alone should alarm the politicians in Washington, D.C. As if we are not already in so much debt as a nation, now we are literally sacrificing the future generation of present-day college kids who are, when they graduate, supposed to be the ones making the money to take care of themselves or their families and putting money back into the American economy. With each individual debt, it means they will not only not be putting money into the shrinking economy, but they will have to pay down their own individual debts for years and even decades to come. My wife, who is attending college at this time, is seeing the results of this debt on the kids in her classes.

It means these kids will have to put off marriage or even having children because they have no way of affording even these things. It means buying cheap, old cars that barely run so that they can get to class at all. It means they have no way of moving out from their parents’ home, and no way to be able to make money on their own. It means that colleges and universities will have to be more concerned than ever about whether people will think that it is even wise to go on to higher education. If many people feel that the price of getting a college education means going into debt for years and being unable to achieve their dreams, then they will not go to college. I see this happening already to the son of one of our neighbors. Their son will not continue his college education because neither he nor his parents can afford to keep him enrolled in college. At present, he is working at a convenience store to help out with the family’s finances. He is far from being the only one going that direction.

There are too many problems with the way the student loan system is. On average, a student will have to pay back $26,000 after they graduate, and for some professions (such as doctors), the debt could be as high as $100,000. One in ten students will default on their student loans, and in 2011 more students defaulted on their student loans than at any other time. To compound the problem, many state governments have been cutting back on funding to many state colleges and universities. This means that many colleges and universities have had to raise their tuition rates and other costs, and this means more students will have to take out student loans just to keep up with the rate hikes. It all becomes a vicious circle, and in the end the student loan program is unsustainable. The worst part of it all is that with a weak job market, it will mean that fewer graduates will be able to repay their student loans, and this debt will spiral out of control. This whole thing is a time bomb that will eventually explode. At present, all the politicians know how to do is bicker and argue, but they have failed to come up with any solution or solutions. In too many ways this problem is tied up with the national debt problem, and when one bomb goes off, it will set off others causing a chain reaction. Lord knows where we will go from here.

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