Student Debt. Is It Worth the Cost?

Remember when you were a kid and you would make up numbers, millions, billions, trillions, gazillions, etc. My brother even convinced me that mabatrillions was a word. We may have to start using those words at some point. What does come after trillions?
There is so much debt in this country owed by us, taxpayers. At some point, it will have to be repaid. One of those massive debt pots is student loan debt. A whopping $1.6 trillion is owed to the federal government for student loans.
If you have a child who has graduated from college with massive debt or have a child nearing college, then this should interest you. Student debt has emerged as the new issue of the century and it can be devastating. Students graduating with huge amounts of debts, often have degrees that will make it almost impossible for them to be able to repay the debt.
With a new administration taking the reins, we will see lots of changes and they will begin quickly. We are already seeing executive orders being reversed and many more changes are on the way,
The Biden administration is being lobbied by several powerful Senate Democrats to cancel huge amounts of student loan debt. This is a terrible idea for so many reasons.
This is very unfair to families who sacrificed all of their lives to set up college funds and contribute through the years to ensure their kids would not have to incur debt. Now we’re asking them to pay for others’ debts as well.
The taxpayer is by far the largest supplier of student loans. The proposal is to forgive government backed student loans. Almost all student debt is funded by the government. Therefore, the taxpayer would be paying for others who didn’t plan or prepare or sacrifice for their children’s education.
It’s also interesting to note that most borrowers are not from poor families. Thirty four percent of the debt is held by the wealthiest twenty five percent of Americans. Sixty three percent is held by those in the top half of the income scale. This is verified by research from the Urban Institute.
Usually when one borrows money, it’s expected that it will be paid back. That’s why it’s called a loan. Since I’m a business woman, if you borrowed money from me to start a business and it became very successful, why would I not expect you to pay me back?
According to a study, ‘The College Payoff’ by Georgetown University, most borrowers profit substantially from these loans. A bachelors degree graduate will earn approximately $1 million more in a lifetime than a high school graduate. Advanced degrees earn even more.
As the government offers more and more student loans, tuition continues to rise. At one time a degree was affordable for many families. As the numbers show, now even the well to do are borrowing for college loans. Forbes finds that college tuition has risen 8 times faster than wages. This is not a sustainable system at this rate.
The student loan forgiveness idea has been around for a long time but is now back front and center with the new administration. One of the arguments being used this time is that it’s Covid related and will stimulate the economy. That’s Hogwash. While it will put money in the pockets of those who have student debt, it will require someone else to send more out of their paycheck to Washington.
This idea also won’t help those most in need.. It’s those people who can’t work remotely or safely from home. It’s the hospitality workers, restaurant workers, retail owners and workers, construction workers, etc.
This is a terrible message to send to our young people. Run up massive amounts of debts because you don’t really have to be responsible and pay it back.
A young woman wrote to my office about this very real problem. She had attended several major universities and received various degrees. Her debt was $288,000 and she had taken a job making $38,000 per year. It will be impossible for her to pay it back in her lifetime unless she hits the lottery. That’s a shame.
My daughter attended a prestigious law school and graduated with huge debt. It was a real sacrifice for her and our family to pay it back. She now has a wonderful job and the debt has been repaid. It would be unfair for those people working at low paying jobs to have been asked to pay off her debt. That was her responsibility and that of our family.
Students must be counseled on the degrees they are seeking and what they can expect the salary to be. There are many degrees that sound impressive but will never be a good return on investment. Students should be aware of this.
Senator Joyce Krawiec represents District 31, which includes Kernersville, in the North Carolina General Assembly.