Paying for college is an intimidating task for students and student loan borrowers. The rising cost of a college degree can often turn people away from attending universities or mean students graduating will be met with an abundance of debt.
Ellen Kaminski, assistant professor of business, said the biggest problem with student loan debt is the balance of debt compared to earnings coming right out of college.
“Often your first job out of college is low-paying,” Kaminski said. “If you have a 10-year plan to pay off your loans, sometimes the cost of college is higher than what’s affordable when they just enter the workforce.”
According to the Federal Reserve, the average student in America graduates with $32,731 in student loan debt, this is not counting masters or doctoral degrees. Although undergraduate debt is capped at $57,500 for students not supported by their parents and $31,000 for students who are, this does not apply to graduate or doctoral programs.
Considering the average cost of a graduate program can be anywhere from $30,000 to $100,000, by the time some people graduate they will be met with burdensome loans and a median starting salary of $50,000.
Chase Porter, assistant professor of political science, said the issue with student loan debt is a systemic one.
“The crisis goes well beyond wiping existing debt off the books,” Porter said. “Systemic-level reform is needed. For instance, federally subsidized student loans make it very easy for many students to obtain loans, regardless of their future ability to repay the loans. Easy access to loans means that the cost of college increases because students can pay more since they have easier access. Thus, an almost unbreakable cycle develops due to these various systemic causes: college gets more expensive, debt increases, ability to repay decreases because job prospects often do not match the debt burden from loans. Of course, the complexity of the problem means that true solutions will prove enormously difficult.”
Due to COVID-19, a student loan emergency relief plan was put in place for students, borrowers and parents. The Office of Federal Student Aid implemented suspension of loan payments, stopped collections on defaulted loans and dropped interest rates to zero percent as of March 20, 2020. These measures have been extended multiple times and currently are in place until Sept. 30, 2021.
Along with the suspension of payments, members of the Democratic Party are urging the Biden administration to cancel $50,000 in student debt per borrower, saying it will help to boost the economy.
“Conceptually, I do not think that forgiving student loans is an adequate solution to the current crisis unless it is paired with other reforms to prevent the crisis from simply reoccurring in the future,” Porter said. “There’s also an ethical question of personal
responsibility — is it fair to forgive student loans when the loans were
willingly entered into and the risk of debt willingly
assumed?”
“However, wiping debt off the books now, while beneficial to the current crop of indebted borrowers, would not be a long-term solution unless we figured out ways to prevent the crisis from happening again (by) dealing with the cost of college, the economics of job market, etc.,” Porter said.
Kaminski is still paying off her student loans and encourages students to pay something toward their loans bit by bit.
“Don’t wait to pay off your loans,” Kaminski said. “Not paying student loans is one of the more detrimental things to not pay on time.
The effects on your credit of not paying student loans can haunt you for a while.
Just pay something. If you can’t, call and get a new
payment plan.”
Austin Romito, CBU alumnus, said he is currently paying off his student loans and being debt-free has become his No. 1 priority since graduating.
“I am very thankful the government has decided to issue interest forbearance on loans,” Romito said. “I’ve decided to take full advantage of that and the money I have set aside for my loans I have now invested into the stock market. As long as my loans do not have any interest I intend on growing my cash through investments until those debt payments are due.”
