Repercussions of College Debt

SOURCE: https://wall-street.com

The increasing student loan debt in America is reaching an all time high.  With a staggering deficit of 1.2 trillion dollars, and over 40 million borrowers, the U.S is seeing major changes in prior economic trends.  Journalist and Charter Financial Analyst, Kelley Holland, describes the variety of effects that the increasing student loan issue has on the country.  In Holland’s  CNBC article titled, The High Economic and Social Costs of Student Loan Debt, she not only shows the effects, but also describes the social and economic pressures that factor into taking out loans.  The article provides a broader objective that enables the reader to fully grasp the issue and the many elements that contribute to college debt loans.  Due to the pressures to pursue a higher education, the student loan debt is drastically increasing allowing institutions to keep prices high which is  altering the way people approach major economic milestones.  

With an average balance of 29,000 dollars owed, men and women are laboring to pay off their mounting debt from college.  American society emphasizes the importance of a higher education and has seen an increase in attendance within the past 30 years. The stable attendance has enabled public and private institutions to maintain a high cost that takes decades to pay off.  The purpose for higher education is to ensure financial stability, because middle-skilled career options are now becoming more competitive and issued to those with a bachelor's degree.  The burdensome costs of the education system can actually lead to disadvantages.  Although the college graduate earns 60% more than the worker with a high school diploma, the costs are suppressing upward mobility.

While young people try to pay off their debt, aspects of their lives are postponed.  The focus on marriages, childbearing, and homeownership have all been redirected toward their debt.  According to the Census Bureau, ‘homeownership has plummeted among Americans under age 35, from 43.3 percent in the first quarter of 2005 to 34.6 percent in first quarter of 2015’, this is showing that an aspect of the economy is being shifted from the past.  Young people have different economic goals for their future and are straying from former trends.  The birthrate among women in their twenties is at an all time low, and had been steadily decreasing.  

This is another example of how student debt is putting other costly obligations like having children to the side. In dire need to repay their loans, people have moved away from professions like social work and health care, in search for higher paying jobs.  If the cost of a higher education is extremely high, it is important for graduates to receive the benefits they deserve from getting a degree.  In certain situations, the costs for a degree ends up as a disadvantage.  This is extremely unfortunate as people who graduate should be able to find a steady job and be rewarded for their work rather than burdened by the cost of their degree.  

Future research question: What can the government do about college debt?