By: Juan Carvajal, Contributing Writer
Gaining access to higher education is becoming more and more difficult with the pressure that laws are putting on students in their attempt to receive and repay loans.
College is a great experience and it certainly can be the gateway to several opportunities that otherwise would not be available. But with the current debates, as well as state and national decisions on whether student loans should be canceled or reduced, college is now becoming a journey with additional challenges besides academics, extracurricular activities, and work.
Now that student loan debt has become a bigger issue, many undergraduates are forced to deal with additional pressure in finances.
Student loan debt has been steadily increasing throughout the years.
Student loan debt has reached the point where it cannot be ignored anymore. If in the past it was a problem, now it has become a threat to the U.S. economy.
According to Zack Friedman, personal finance expert and best-selling author of The Lemonade Life, “the total student loan debt in the U.S. is currently around $1.6 trillion and approximately 45 million borrowers have student loans. In addition, on average, borrowers owe $32,731, and it is the second-largest debt category in the U.S.—second to mortgage debt.”
With student loan debt being at its peak, the Democratic presidential candidates are trying to tackle it from different angles. On the one hand, Bernie Sanders suggests wiping out student loan debt for these 45 million borrowers and ensuring every qualified student gets free public higher education.
Likewise, Elizabeth Warren’s plan is to reduce student loan debt by more than $30,000 and, in addition to that, raise taxes on the rich by an exponential margin.
Furthermore, another plan, supported by candidate Mike Bloomberg, is to offer a two-year tuition-free college, as well as Pell grants that aim at students with the lowest income.
Student loan debt has been steadily increasing throughout the years.
According to Frank Orlando, an associate instructor of political science at Saint Leo University, “The question on why politicians are trying to cancel student loans is not easy to answer because there are many things that must be taken into account before making any argument.”
“Candidates are trying to tackle debt from different angles. But there are many other candidates who don’t want to cancel student loan debt,” said Orlando.
From a political standpoint, telling high school graduates and undergraduates that student loan debt will be canceled is an ideal way of gaining more votes and obtaining their trust.
Moreover, based on a credit assessment done by Moody’s Analytics, “canceling would result in a slight increase in household consumption and investment, an improvement in small business and household formation, and increased homeownership in the long-term.”
Sanders and Warren will keep discussing student loan debt until one of them accomplishes something that the other cannot (The New York Times).
However, bigger downsides need to be considered. Additional consequences would include future student loan borrowers borrowing even more debt, which may not lead to forgiveness later on. Also, according to Forbes.com, the federal government would lose about $85 billion, and high-income earners may experience limited economic benefits.” Finally, canceling student debt is not fair for those who have already paid their student loans right from their own pockets.
Even though student loan debt is a huge problem, we cannot rely solely on politicians for a solution.
