Over the past few decades, student debt has risen tremendously. Student financial assistance has been a huge issue since the late 1980s when parents and students accrued nearly $10 billion in federal student loans. Today, the U.S. total student debt stands at around $1.6 trillion according to the Department of Education's Federal Student Aid Office.
The average debt for a college graduate is about $40,000. Most people will go into debt at the ages of 18-20 and continue paying off their student loans until they’re 45-50.
Most people would consider student loans to be “good debt.” Taking loans can be very beneficial because you are investing in your future. It enables students to pursue higher education and increases their earning potential. On top of that, there are lots of ways to lessen the impact of debt. Student loans carry relatively low-interest rates and flexible options include student loan forgiveness.
However, student loan debt makes early financial burdens for young adults, which can lead to mental and physical health issues and overall stress. This, in turn, hurts the economy. With the weight of debt on students' shoulders, people are less likely to be financially successful in the future. “About 62% of adults in the U.S. with federal student loans say their debt negatively affects their mental health,” according to the CNBC + Acorns Invest In You Student Loan Survey.
COVID resulted in many economic challenges, and because of this during the past few pandemic years, support was given to those who couldn’t afford to keep up with student debt payments. This meant that some people with federally held loans weren’t making payments towards it for a period of time. However this support will expire soon, and action is being put in place to ensure individuals will not fall even further behind once payments resume.
The Biden-Harris Administration has a relief plan for student debt. This three-part plan will help low and middle-class student loan borrowers transition back to regular payments. This program includes debt forgiveness of up to $20,000. The administration has extended the loan repayment pause many times. Now to make a smooth transition back into repayment the administration will extend the delay one last time until Dec. 31, 2022. Starting in Jan. 2023, payments will resume.
Up-to-date income data is already available to the U.S. In the Department of Education, so many people may not have to fill out an application to get loan forgiveness or cancellation. But if you need to fill one out, you are advised to apply before Nov. 15 and can expect relief within 4-6 weeks.
Going into significant debt right out of high school scares a lot of students away from applying to college, but there are many ways to lessen the impact of student loans or eliminate them, even before the more significant change takes place.
The best way to start is by applying for any scholarships available. Even if you’re not sure whether you will qualify for them or not, just start applying. Seek out scholarships and financial aid, because it will greatly reduce financial burdens. It offers so many advantages, makes a resume stand out, provides opportunities to connect with people, and allows a person to focus on their education.
Another important aspect is saving money while in college. College schedules can be very flexible. It allows many students to have part-time jobs or get work-study and work on campus. Asking around and forming good relationships with professors will help one's chances of finding secure jobs to start saving money.
In some situations, you can get a federal student loan forgiven, canceled, or discharged. There is public service loan forgiveness, teacher loan forgiveness, closed school discharge, total and permanent disability discharge, discharge due to death, discharge in bankruptcy (in rare cases), borrower defense to repayment, and so many more programs.
Loan forgiveness or cancellation means you are no longer required to make payments on your loans. You can often have your debt lightened up or erased. All of these are individual options to help with debt, but none of them will help the rotted problem of this nation's trillion-dollar debt crisis. At some point, the government needs to recognize the problem and put action in place to help rather than ignore it.
“Democrats in Congress have suggested making all federal student loans and repayment plans eligible for PSLF, waiving restrictions for forgiveness and automatically qualifying borrowers,” says New York Times journalist Anna Helhoski. Another option could be making zero interest rates on student loans permanent. People should pay their loans back, but they’re not on an even playing field because the interest makes it more than what they borrowed.
An overall solution to the issue is making college tuition free. Free college would expand access to education and a more educated population means great economic and social benefits for the country. It would also allow students to follow their passions, widen the workforce, and help repair historic inequities.
Ways one can help push for government help by using the biggest power which is a person's voice. Show up to protests, press policymakers, continue the conversations, and vote, there are so many people struggling with money and there are so many ways to help ease the problem. Government officials need to take responsibility and make some changes.
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$1.75 trillion in total student loan debt (including federal and private loans)
$28,950 owed per borrower on average
About 92% of all student debt is federal student loans; the remaining amount is private student loans
55% of students from public four-year institutions had student loans
57% of students from private nonprofit four-year institutions took on education debt
https://www.forbes.com/advisor/student-loans/average-student-loan-statistics/