The ongoing skyrocketing of tuition prices have forced scores of aspiring college students to take out student loans in order to finance their educations. With graduates making 98% more per hour on average than people without a college degree, attending college is seen as an imperative to joining the middle class.
In theory, loans provide a leg up for underprivileged students attempting to move up the socioeconomic ladder. However, the path to receiving a coveted diploma is often fraught with dubious lending practices and deliberate misinformation, to say nothing of the exorbitant price tag. Even though more than half of Americans agree that the cost of college is too high, there are many special interests working hard to keep it that way.
In the past three years, the number of colleges and universities charging over $50,000 per year for tuition has increased by 2400%. During the same time period, the average wage of the American worker grew by a paltry 2%. Working full time, an American making federal minimum wage makes about $15,000 a year, putting higher education well out of range, even in-state public universities cost an average of $23,000 per year. That’s four times the average price just ten years ago.
Unless you come from a wealthy background, there’s really only one choice: take out a student loan. Nearly 38 million Americans have student loan debt, totaling about $1.2 trillion dollars nationally. Student loans are now one of the largest sources of personal debt in the United States, outpacing even auto loans and credit cards.
The huge new source of debt comes with an outsized cost. Student loan debt is arguably one of the worst kinds debt out there. In the span of a single generation, student loans have changed from a useful mechanism for getting ahead to something akin to a modern form of indentured servitude. This, in tandem with the ever-increasing cost of attending school, has led America to a point where half of students who have direct loans are delinquent or late on their repayment.
There are shockingly few consumer protections in place to guard former students from facing the collector. Wages, social security, and even disability checks may be garnished by the Department of Education if a borrower falls behind on payments. Alarmingly, even death is not an obstacle. Unlike other kinds of debt, which can be forgiven through declaring bankruptcy, student loan debt is a specter that may haunt graduates for life. If a debtor dies, many private lenders will strong-arm their mourning family into paying off the remaining amount in full.
Low and middle-income students, with little representation in Washington, have been overlooked by the federal government for years. For all the lip service that politicians pay to the issue of student debt, very little action has actually been taken to remedy it. This, of course, is what private lending companies such as Nelnet, Navient, and others, hope for. Their millions of dollars spent collectively on lobbying have long paid off in their continued relationships with the federal government. Sallie Mae has spent nearly $3 million on lobbying politicians every year since 2007.