For most of us, thinking of student loans brings about images of a brutal onslaught of never-ending bills in the mail. The exorbitant cost of obtaining an education in the U.S., combined with the greed of private companies, has culminated in one of the worst financial crises of all time.
Sadly, student loan horror stories have become quite commonplace. Nowadays, people tend to spend more energy paying off interest rather than actual loans themselves. As a result, many are left paying off their loans for a large portion of their professional lives, all the way into their 40s and 50s. The irony here lies in the fact that students are falsely promised that their jobs after college graduation will be able to help pay off the very loans that were taken out in hopes of securing those coveted jobs. Today, this cycle afflicts more college graduates than ever, many of whom already struggle to gain financial independence in the current economy.
The student loan industry has unfortunately become a booming industry in its own right. Given America’s love of capitalism, it makes sense that much of the student loan business has become privatized. Many companies specialize in exploiting students through student loans, most notably Sallie Mae. Initially started by the federal government in the 1970s to administer student loans, Sallie Mae eventually morphed into a private company with numerous investors, specializing in private student loans for students who aren’t eligible or don’t meet the stringent requirements for federal student loans. Nasdaq recently published an article encouraging investors to buy Sallie Mae stock, which is incredibly concerning for a multitude of reasons. In truth, the company is more concerned with creating profit for its high-profile investors rather than actually assisting the students that the company claims to be helping. Since Sallie Mae’s customer base is composed of students who can only borrow money through private loans, the company is able to charge students any interest rate they want, knowing that many of the students have no other options. This goes to show that if the rich can find a way to profit off of nearly every financial disaster in America, then the student debt crisis is certainly no exception.
Evidently, the Biden Administration cannot seem to entirely make up its mind on the issue of student loans. After what seemed like a dim prognosis for student debt after disappointment over Biden’s handling of the crisis at the beginning of his term, this sentiment has begun to change. Biden recently announced that he is canceling another $6.2 billion worth of student loan debt, in addition to the $15 billion he has already canceled. By loosening the requirements for those eligible for debt forgiveness, Biden has reopened the possibility of greater financial freedom for a significant portion of student debt-trapped Americans. Though the majority of borrowers are still left paying off massive loans, these recent changes in policy are a step in the right direction.
Still, the Biden Administration’s rocky stance on student loan policy amidst the pandemic has left many borrowers confused and endlessly waiting for further information and news. Since the start of the pandemic, student loan repayments have been paused–a policy that is likely to continue for the foreseeable future. Since many expected these loan payments to restart in May, this came as quite a surprise. However, the solution to the student debt crisis cannot consist only of continually extending the pause on loan repayment. It is inevitable that these payments will have to eventually start up again. With loan companies angry and eager to restart payments as soon as possible, this pause is merely a temporary solution to an ever-worsening situation.
The only permanent solution is to cancel debt now. To eliminate further confusion about the fate of student loans, Democrats need to decide on a set plan of action soon. With sufficient funds and ample time before the primaries (where Democrats may lose their majority in Congress), Biden and Congress have the perfect opportunity to make a move. Not only will Biden be able to fulfill his original campaign promises, which include eliminating $10,000 of student debt per borrower, but Democrats may gain a large number of invaluable votes in the process, perhaps enough to save them from losing their congressional majority. Whether or not Biden will pursue this student debt plan further, however, is a question that remains on everyone’s minds.
While the average college student in America will end up taking on some student debt, Boston College isn’t exactly a prime representation of the average college student. BC has one of the wealthiest student populations in the country, with more students coming from the top 1% than the bottom 60%. Thus, it shouldn’t come as a surprise that fewer BC students take out student loans than students at other universities.
The BC Financial Aid Office also flaunts BC students’ low loan default rate, which comes in at 0.9%, in comparison to the 9.7% national average. This is undoubtedly a product of the fact that many BC students typically come from well-off socioeconomic backgrounds and enjoy more prestigious job outcomes, which are generally able to pay off loans more efficiently. In keeping with its reputation as an institution that meets full financial need, however, BC is eager to take complete credit for this accomplishment. Might this be less an indicator of the success of BC’s Financial Aid Office and more a reminder of how much more fortunate BC students are than the rest of the country? It certainly seems to be the case. When it comes to discussions about the student debt crisis, as BC students, we must take into account the extreme privilege that much of our student body holds. Most of our experiences are not those of the majority of students in the U.S., who will be burdened with debt for many years to come.
Another alternative to addressing the student loan crisis is by tackling the high cost of private education in the U.S., though this is obviously much more difficult. Annual increases in tuition have become a common phenomenon occurring at schools all across the country, including at BC. As the cost of attendance continues to rise, more and more students will have to resort to loans. These prohibitive costs will likely keep many students from attending college, especially those whose financial aid packages do not cover enough of the cost. However, for much of BC’s student body, rising costs in tuition are not a major deterrent or financial barrier to gaining full access to the college experience, especially given the wealth present at BC. As a school that is supposed to cover full need, BC shouldn’t even be making its students take out loans to begin with. In keeping with its Jesuit Catholic ideals and promoting the common good, BC needs to do a better job at remaining as affordable as possible to as many as possible.
While the student loan crisis may end someday, it does not seem like the end is in sight. Those in political power continue to prioritize anything but the cancellation of debt, unconcerned with the millions of students whose financial futures are crumbling. While making debt cancelation a reality may be a challenge, not all hope is lost. Students have a voice, and now is the time to use it.
Indeed, if college is supposed to prepare us for the future, then that starts by making it affordable to all and eliminating the need for loans altogether. Only then will we be able to secure futures for all members of our generation.