North Texas Daily

Thank the US government’s good intentions for creating the student debt crisis

Thank the US government’s good intentions for creating the student debt crisis

Thank the US government’s good intentions for creating the student debt crisis
July 02
12:00 2021

Assuming you are a traditional college student taking out loans to pay for tuition, the tab after walking the graduation stage is not a pretty sight. The class of 2019 shows 69 percent of college students finishing their degree with an average of $29,900 in debt, according to Student Loan Hero as of January 2021. Let’s call it $30,000 of debt plus another $8,000 to $10,000 after paying off the interest rates, ballparking it at $40,000.

Remember, this is an average college graduate we are talking about with a $40,000 weight on their shoulders. Who in their right mind thinks it is OK to be $40,000 in the hole risking four years of their life on something uncertain?

The answer is the United States government guaranteeing student loans and colleges raising tuition prices as a result. The goal of a college is not to educate you — it is to finish the fiscal year with green margins on the balance sheets. 

The policy intending to put more young adults in college by guaranteeing students loans backfired as the student loan debt now stands at $1.7 trillion

Is it good if more people are in college pursuing a degree? Maybe, but a $1.7 trillion student debt burden tampering adults gets in the way of their personal economic freedom.

Since loans were guaranteed to students over the years after the creation of the Federal Family Education Loan Program (FFELP) in 1965, colleges and universities spiked up tuition costs because fewer people are paying out of pocket and became dependent on loans to finance their education. FFELP was later moved to the oversight of the U.S. Department of Education in 2010 after the previous 45 years were monitored by private lenders.

The way colleges and universities set their tuition rates is to take their overhead costs (salaries of staff, maintenance costs, electric bills, etc.) into consideration and find a rate to charge the students to make a profit.

Using UNT as an example, the 2021-22 tuition costs for undergraduates are $11,090 (for in-state rates) and $20,900 for out-of-state rates, including a student population is 41,000. Assuming all 41,000 are charged the regular undergraduate tuition rate, the school brings in $460 million. If the school spends less than $460 million on its overhead costs as mentioned, they maintain a profit and stay in business.

Asking most 18-to-25-year-olds to pay for tuition costing over $10,000 per year over four years is difficult unless the individual comes from a wealthy family or has a high-paying job away from school. The rising tuition rates and guaranteed loans are a chicken and egg scenario, keeping students dependent on loans to stay in school.

Another reason college tuition rates are going up is due to the supply and demand within the workforce of attaining a degree. Colleges know their institutions are the key barrier to entry in young adults pursuing most careers with high paying salaries, making the demand for a college education higher. Great demand means more students and higher overhead costs, meaning the prices of college tuition go up.

College tuition was relatively cheaper before the late 1980s when the demand for a college education was not as high. Education Data’s website show data on the average debt of college graduates between 1970 and 2020.

In 1970 the average graduate owed $1,100 in student debt (about $7,500 adjusted for inflation), $3,900 in 1980 ($12,260), $6,760 in 1990 ($13,530), $17,350 in 2000 ($26,160), $24,200 in 2010 ($28,860).

Looking at the overall costs of colleges and universities, the cost of an undergraduate degree rose 213 percent at public schools and 129 percent at private schools from the late ’80s to 2018, according to Student Loan Hero.

The solution in making colleges lower tuition is a reality we must accept: not everyone needs to go to college. People should gain work experience, network, become an entrepreneur and become an employer if college does not seem right to them.

What about forgiving student debt as President Joe Biden and other politicians suggest? Absolutely not, this will harm young and working-class Americans by skyrocketing inflation. The $1.7 trillion price tag is something Americans need to live with and finance, no-strings-attached. 

To be clear, education always needs to be there for people to pursue it. One of the great things about the United States is nobody is turned down on basic education and thousands of colleges are standing for anyone to explore higher education.

But is it worth it for $40,000 to get a higher education degree? For me, it is a guaranteed “heck no!” any day of the week. Some of the greatest journalists and writers in history are self-educated and did not need a college degree to contribute their work.

Pucker up and kiss the days of “working your way through school” goodbye. With a 12-to-18-hour weekly class schedule, college students are compromised on making the choice of maintaining a high GPA studying in their free time or working to afford rent and other bills to survive outside the classroom.

Circling back on the earlier question, who in their right mind thinks it is OK to be $40,000 in the hole risking four years of their life on something uncertain? Hopefully, it is future college students who carry the mental capacity of refusing to be an institution’s bread and butter. 

Featured Illustration by J. Robynn Aviles

About Author

Preston Rios

Preston Rios

Related Articles


No Comments Yet!

There are no comments at the moment, do you want to add one?

Write a comment

Write a Comment

The Roundup

<script id="mcjs">!function(c,h,i,m,p){m=c.createElement(h),p=c.getElementsByTagName(h)[0],m.async=1,m.src=i,p.parentNode.insertBefore(m,p)}(document,"script","");</script>

Search Bar

Sidebar Thumbnails Ad

Sidebar Bottom Block Ad

Flytedesk Ad