What Will It Take to Solve the Student Loan Crisis?

Student loan debt is a problem and a crisis that will continue to get worse as the years go on because of people’s perspective on student loans, the available job force, and the economy itself. Each person can be part of the solution in helping the economy but if it doesn’t change the economy will even get worse.

With the coronavirus driving students to miss payments -- it will get worse before it gets better. In this article, I will talk about the student loan crisis and how it affects all of us, not just students.

Why should you care

Student loan debt is not something most people think about until it is too late for them to reasonably pay it back. Most people don’t realize that theses student loans can and will haunt them until they are paid.

I used to work for a credit suggestions company and I talk to a lot of people daily that are held back from their future goals and current goals because of their student loans.

It is scary how much this debt can affect you even one year after getting out of college. Many people just put off paying student loan debt because they have more pressing bills on their minds and barely have enough to live comfortably.

Some people even confuse student loans with grants and scholarships and do realize that they must pay them back. Debt in general is not taken as serious as it should because it is viewed as free money until it comes back at you with interest.

Many of these student loan debts could be taken care of by scholarships and grants that are available if the students actively search and apply for them instead of fully relying on student loans.

Many people with student loan debt never graduate from college. This means they can not use the knowledge that they gained during their time at school. Most of them must work jobs with minimal wage just to get by or resort to using money earning apps, side hustles, or securing a part time job. Some do go back to school, but they have increasing student loan debt.

There are also many cases where students graduate and can not get into the career field they studied for and settle for less satisfying careers to just get by. The supply and demand for jobs and careers can affect how many people can pay off their debt or just let it sit around until they can find a way to repay the debt. With a competitive job force and limited resources for people who do graduate, many graduates never use their degree to get into a career.

How does the economy get affected?

The economy effects everything regarding student loan debt. Many people go through the student loan forgiveness plans which can help the borrower, but it hurts the economy when the borrower can’t return the finances back to the lender.

With less people returning their student loan debt, there are less lenders willing to loan out to people who will never pay back. The more debt that is out, the less flow of real finances goes to the economy.

Money is the center of all this debt. If people can’t make money, they can’t pay off their debt. If they can’t pay off their debt, people will avoid it and make it harder to pay off the debt.

The debt then gets out of control and people are likely to go to desperate measures like bankruptcy. If student loans are included in bankruptcy that money will be lost, and the economy will worsen.

Overall, the student loan crisis will only get worse unless the students make a difference in understanding the nature of student loan debt, the available career field, and the economy. Each step can make a difference in making the crisis become manageable.