Curious on people's views regarding the student loan "crisis". I by no means have a perfect answer, nor do I even know if it is truly a crisis. As a society, however, we have deemed it as such.
In particular, for those who view that this debt should be wiped, I severely struggle with the concept of just wiping >$1T of debt.
For some people, they absolutely had to go into debt to attend college for numerous reasons (family issues, health issues, etc). For others, they chose to go to a private school that may have cost $50,000/year. The brunt majority I would argue, however, fit into a pool that is more along the lines of going to either a "state" school or a "University of State" school. I was around these people, and more specifically, I was one of these people. I'm by no means here to brag, as I absolutely had a relatively privileged childhood, but I was able to graduate through college with absolutely no debt. Had I received no assistance from my parents (allowance that I saved 90% of as a child, a high school graduation gift, and a one time college gift), my amount of debt would have been somewhere along the lines of $5,000 - $10,000.
So what? How does this have anything to do with people graduating with $50,000....$100,000....or more in student loans (I believe average is $37k)? The path I'm going to go down is that state & federal governments often already provide ample resources to get out of college with a minimal amount in loans.
The particular school I went to is approximately $10,000 per year for tuition, fees, and books. This would indicate a 4 year degree should run a total of $40,000. My particular state actually lets you go to college during your Junior & Senior year of high school if you so choose. The only criteria...you have to be top 1/3 of your class (Junior) or top 1/2 of your class (Senior). Once accepted, 100% of your tuition, fees, books, etc are paid for by the State. You are expected to take certain generals that are considered sufficient to satisfy your high school requirements (these, however, often pair pretty well with generals that are already required for college). If somebody were to do this both years, their total cost for a 4 year degree just went down to $20,000. In addition, it is relatively uncommon (other than for the severely poor students) to not receive at least $500-$1,000 per year in scholarships or grants (due to financial status). This knocks the cost down to $18-$19k. The final kicker is assuming you are working during college (one does have to pay for rent, gas, food, etc) and file your own taxes, there are tax credits offered by the federal government for $2,500/year (assuming you spent at least $4,000 on college). As I don't expect the majority of college students to be making $35-$40k per year, lets presume they are only getting $1,750/year back with this credit ($1,000 is refundable regardless of how much you paid in taxes, remainder can only refund the federal tax you paid). This removes an additional $3.5k for the remaining 2 years of college.
You are now down to a total cost of a college education of $14.5-15.5k. Assuming you had no savings leading up to college and are unable to save any of your job money, this is the amount of debt you would have with legislation currently in place.
So then, how is the average student loan sitting at $37k if the entire education should only cost $14.5-15.5k? It is largely not taking advantage of what is already provided to us (not going to college for Junior/Senior year; not filing tax return properly; not even signing up for a single scholarship even though there are HUNDREDS available at every single school). In addition to these, students have a tendency to want to enjoy an experience for college. This experience often means living a certain lifestyle where further loans are taken out to assist with their rent/student housing, travelling abroad, buying a nice car, etc.
So what is my proposed solution? Well for one, those who chose to get insane amount of student loans unfortunately need to live with their decision to sign the papers. It was often hundreds of small decisions on their part that led to their loans being substantially higher than the person next to them. I don't believe it is at all appropriate to just up and forgive these loans for all of these people. If there is an honest argument somebody can provide as to why this is acceptable, I'll counter and say why not just do this with mortgages as well. Many people struggle to make the payments required to live in their house, but you absolutely need to live somewhere.
Putting that aside, what about going forward? What can we do to help prevent this situation from getting worse than it already is? I personally think the answer is pretty simple - provide appropriate resources to TEACH students what is available to them to assist with the cost of college. Inform students about the college during high school option (my high school actually tried hiding that this was available as they lose funding from the state...fortunately we had heard of it from somebody else). Further inform students of all of the grants and scholarships available to them. Teach students about the tax refunds that are available to them when they go to college.
Maybe some people had better experiences, but I largely had to figure all of the above out on my own. Most people I told about the tax refund had absolutely no clue what I was talking about, and many of the people who knew I was going to college during high school didn't want to give up their high school experience.
If the average student loan after graduating was $15,000 (versus the current $37,000), I don't think we would be in a "crisis" at all. Generally speaking, people should be able to pay off a loan of that size within a few years of graduating school.
Money can't buy happiness. Just video games, which make me happy.
