Debt-Be-Gone

Each fall, young people throughout the nation will head off to college for the first time. For many of these students, their college years will prove to be some of the most formative times of their lives. Earning a college degree is a great achievement, and a diploma can open doors that were previously closed. Unfortunately, many of these students will also graduate with overwhelming debt.

The student debt problem is a serious issue. Debt puts young professionals at a substantial disadvantage as they begin their lives. They are often forced to delay important milestones such as purchasing a home and starting a family. To solve this crisis, we should focus on long-lasting measures to enhance the education system and student life rather than focusing on quick resolutions that solve nothing like cancelling the debt.

Expensive tuition is one of the key factors contributing to the growing problem of debt. In addition, the price of room and board, books and other essentials quickly add up. These extra costs combined with tuition make it difficult for many students to grasp the true cost of college and make informed price comparisons.

Some argue that students should forgo higher education altogether due to its astronomical cost, but according to the Center on Education and the Workforce (CEW) of Georgetown University, over 65 percent of job openings through 2020 will require a college degree. Addressing the decline in skilled workers in trades is certainly part of the solution. Students should be made aware of the opportunities to pursue a trade rather than a traditional university degree. However, forcing all students into skilled trades will swing the pendulum too far in the opposite direction, so we need to strike a balance.

Some politicians propose eliminating student debt obligations. However, this idea doesn’t solve the fundamental problems causing skyrocketing tuition and debt, and it would only encourage bad future decisions by both colleges and prospective students. About 92 percent of student loans are owned by the U.S. Department of Education, so universal debt cancellation would damage that revenue stream to the U.S. government. In addition, canceling student loan debt now could lead future borrowers to expect that their debt will be erased as well and incentivize them to take out even more loans rather than borrowing responsibly.

If we want to dig our younger generation out of debt, we need to take steps to prevent the problem in the first place. Therefore, we should pass two pieces of legislation that are currently in the Committee on Health, Education, Labor, and Pensions. This legislation is focused on helping students make more informed decisions to reduce student loan debt at every stage of their lives. This legislation emphasizes the values of smart spending and fiscal discipline. For instance, the Net Price Calculator Improvement Act would help students understand how much their education will ultimately cost when shopping for colleges. In addition, the True Cost of College Act would make a universal, uniform financial aid offer that clearly provides information on the cost of the college, the amount of grant money the student would receive, and the amount the student would ultimately be responsible for paying.

Another good start would be to implement state and local plans to eliminate student debt. For instance, Tennessee introduced the “Tennessee Promise,” which promised young people an award at an eligible postsecondary institution toward tuition and mandatory fees after all other gift aid was applied. In New York, students are given a four-year scholarship that converts to a loan if recipients leave the state after graduation. Other states offer city programs funded by private donors or state grants for workforce-oriented degrees.

Cities could offer property tax relief to employers that embrace student loan repayment benefits for student employees. Employers could offer student loan counseling to their workers. Public and private partners could work together to establish a student loan refinancing authority to offer more competitive rates to state residents.

Through collective action, we can protect our future by allowing our movers and shakers to lead without the crippling burden of student loans.