Millions of children grow up with the aspirations to one day attend college, in order to further their education and receive a degree.  For many of these children, college is a very real possibility.  For a great deal of others, however, the idea of going off to college is merely a hope.  One of the most prevalent reasons these children cannot go to college is because of the ever-growing costs.  Many people who graduate from college in America today become in debt for many years after the fact.  Why is this?  People simply do not know any better.  Students and their families are unaware of the financial situations they put themselves into when they sign up for college.  Because of this ignorance, college debt in America has reached a crippling level for both the individual and the economy, and this debt must start to be eradicated. The way to do this is to make families more aware, and allow them to use every available resource when making decisions based on their loans.

The problem of college debt is prevalent all across the United States.  In fact, over two-thirds of graduating students graduate with some sort of debt associated with college (Denhart).  In fact, student debt is the number one cause of personal debt in the United States, having recently surpassed credit card debt, as student loan debt has exceeded $1 trillion.  This figure undoubtedly leads a great number of people to shy away from the idea of college.  They feel that it's most likely better to live and work without a college education, as opposed to spending a great deal of their life trying to dig out of the debt they've accumulated.  Denhart also states in his article that the average student debt at the time of graduation is a whopping $26,600.  Clearly, this is a large amount of money that these graduates owe back in loans.  This amount of money will take a large amount of time to pay off in its entirety as well (Denhart).

The largest reason for such a large cumulative total of student debt is that parents and their children simply do not have an understanding of how the loan system actually works.  Students often make their decisions on their loans and how much they are wiling to take out based off of what their anticipated future income will be (Simpson et al.).  The problem with this is that the majority of college students actually change their major throughout their college career.  When a student changes his or her major, more than likely the pay rate for the new major will be different than what the previous major's was.  Because of this, the debt the student is accumulating will be a larger burden and a larger percentage of potential income.  The study, headed by Linda Simpson, came to the conclusion that "freshman students lacked personal and general loan knowledge and had unrealistic expectations of future income at graduation."  Because of a lack of knowledge and research, students end up making bad decisions in which they will be forced to live with the consequences for a great number of years afterwards (Simpson et al.).

There are also other causes that have been thrown around for the reason behind the crisis we find ourselves in today.  Tom Karsten, president of an SEC Registered Investment Advising Center in Fort Worth, Texas, implies that families are truly their own enemies when it comes to loans.  He states that around 2 million more students could actually receive financial aid through FAFSA if they would have just simply applied.  A lot of students don't think that they will get any benefit from sending in a FAFSA application, but in reality a vast majority of them do.  All it would have taken for these 2 million students was just to fill out a form online, and they would not have had to take out nearly as much money as they did.  Karsten also brings up the idea of charter schools being a large part of student debt.  Although not directly related to college, private charter schools contribute to a large amount of the debt for students.  These schools can cost in excess of $30,000 a year, and some students attend these schools from kindergarten up through high school.  The total spent on these schools in this situation is upwards of $390,000.  After spending this much on school even before college, it begins to make sense as to why so many students are in debt following college graduation.  In addition to this charter school fee, these families would be paying over a half of a million dollars.  If they have two children, they are spending over a million dollars on simply education for their children.  When parents and families are making the decision to send their children to these schools, the most likely do not take into account the effects on the future education of the children.  If they knew what trouble they would be causing economically in the future, they most likely would opt to not use schools that are so outrageously expensive.  Another problem that has lead to such a large amount of debt is that the United States government actually has antitrust laws in place prohibiting peer institutions and college administrators to meet about tuition prices (DiSalvo).  This is considered collusion by the Department of Justice.  DiSalvo, the president of Saint Anselm College in New Hampshire, also brings to light the fact that the United States government hands out over 90% of the loans to students in the country.  DiSalvo also brings forth the idea that some families make it difficult for other families to pay for college.  Some families take out loans that do not need them, because they can make a profit off of investing the principle.  Allowing this to happen causes the rates for those who actually need the loans to remain higher, when they could be much lower.

There are already a number of proposed solutions to the problem of college debt, but none of them are sufficient enough to eliminate the problem.  They can stop the bleeding, but not plug the wound.  First, Shai Reshef, founder of the University of the People, proposes his plans and ideas in a TedTalk.  His program, University of the People, offers low-cost degrees to students who are underprivileged and who need economic help.  The program offers online degrees in a number of different fields.  However, this program is only beneficial for solving part of the problem.  In order to make college a more viable option for everybody in the country, schools have began free or reduced tuition programs for those meeting certain criteria.  These programs are at very prestigious schools across the country, such as Brown and Harvard (Hirsch).  These recently implemented programs have begun to make college much more possible for students who may not have had the opportunity without them.  Although this is a start to the solution of the problem, it in no way is going to completely obliterate the problem that has become so prevalent.  The Institute for College Access and Success (TICAS) Project on Student Debt calls for "simplification and better access to information regarding student loan debt, including information on consolidating debt, and increasing students' information to both school's default and graduation rates." (Denhart).  Simplification of this information would lead to a better understanding of how the system truly works, and would most likely lower the cumulative debt.

The college debt problem has effects outside of the personal lives of the students as well.  Phyllis Korkki from The New York Times gives a number of different negative effects that college debt has, most of them on the economy.  The most prevalent of these ripple effects is that those with student debt are much less likely to start their own business.  This is clearly not good for the economy, as there are less business opportunities and less money being put into it as well.  Korkki quotes a professor at Pennsylvania State University who stated that people only have a certain level of "debt capacity."  Essentially, people have a certain amount of debt they are willing to take on.  Most of the time, this debt capacity is reached by college debt, and so there is no more debt to be put out there in other ways, such as entrepreneurial debt.  Another way in which college debt negatively affects the economy is that it causes a decline in home ownership trends (Korkki).  The Federal Reserve Bank in New York says that since the beginning of the recession, there have been fewer under-30 year olds buying homes in America.  This number gets even lower when you look at those who have had debt from college and student loans.  As with businesses, less home ownership leads to less money being thrown around in the economy.  It also forces a person to find other ways to live, which essentially causes a pause in the economic system of real estate, and an increase in homelessness.  The last way that Phyllis Korkki mentions about how debt affects more than the checkbook is that debt often causes students to change their career choice.  They feel they must get any job they can, as fast as possible to begin paying off the debt they have accumulated.  These jobs are most often low-paying public-interest jobs, and they are not enough to adequately pay off the loans as well as live the life the students want to live.  The effects of the college loan problem are much larger than what most people typically think of.  The problem has a large effect of the economy of the country as a whole, which is a very scary thing at the rate the loan debt is trending.

On the other side of things, there are some people who believe that college debt is not as negative as everybody seems to make it out to be, and that it is actually very beneficial.  There are a multitude of reasons that these people say loans can be a good thing.  College loans do allow students to achieve a college degree and graduation.  About 72 percent of graduates stated that they agreed with the statement of "I am satisfied that the education I invested in with my student loan(s) was worth the investment for personal growth." (Baum).  These people who are graduating with massive amounts of debt are okay with it, because they feel the value of their education outweighs the burden of the loans.  They believe the decision to borrow for college was a wise one.  The opportunities available to them after graduation are more beneficial than the loans are harmful.  Baum also states in her study that these people (graduates) historically make a higher income than their non-degree holding counterparts.  Ryan Lane establishes two more reasons that college debt is actually a beneficial thing.  He states that these loans can help students build and establish their credit scores.  A good credit score is necessary for important steps throughout life, such as buying a car or a house.  Having loan debts, and repaying them in the correct manner can give students a leg up with their credit.  It is important to show the people that are going to be lending you these things that you can manage your obligations and are reliable to do so in a timely manner (Lane).  Lane also states that debt is a good thing because some of the student loans actually come with repayment benefits.  For example, if you find yourself unemployed, with a lot of federal loans it is possible to put them on pause until you are able to find sufficient work again.  Sometimes, it is possible to have benefits so large that your debt is eliminated altogether (Lane).  Although it is hard to look at these silver linings of loan debt, they are there if one looks deep enough at the whole situation.

Steven DiSalvo has some good information in his article of things to keep in mind to start to alleviate some of the loan debt we have in America.  Something he says that is very important that if colleges want to lower their prices or discount rates, then enough schools would have to do it to where the average is brought down substantially.  If only one university does so, it will make people thing that there is a problem with the institution (DiSalvo).  It is also important to note that many for-profit institutions have been taking more and more federal money away from non-profit institutions, keeping the prices very high (DiSalvo).  

The issue of college debt is very important both to families with children, and to Americans as a whole.  Obviously, the issue of college debt and loans is very important to families who will have children going through the process soon.  It is important to know what they are getting themselves into, and to know if they can handle the burdens that college loans bring.  The issue is relevant to America, especially the economic aspect, as well.  There are plenty of negative effects on the economy that are talked about in this paper, and it is evident that if we keep going on the track that we are now, the economy will suffer.  The recession of 2008 was very bad for a lot of people and their families, and there's no telling exactly how bad the effects will be if we allow the situation to snowball.

The first step to alleviating the debt that we have is to provide better information to potential borrowers about what exactly they are doing.  The more information available, the better for the borrowers and their families.  If everything is laid out for them, they will be able to make a more informed decision.  Something else that needs to be done is to be sure that the families are using all available resources.  This could be done by filling out the FAFSA form even if they are unsure if they will receive aid or not.  Clearly, the problem will not be completely gone any time soon.  What we can aim for, however, is $10,000 as opposed to the $26,600 mentioned earlier.  Josh Mitchell from The Wall Street Journal states that the "magic number" of debt is around $10,000.  Having this amount of debt actually gives the students the incentive to graduate.  They feel they need to graduate to get the debt paid off.  Any number after $10,000 leads to a decreasing graduation rate, however.  This holds especially true for low- and middle-class students.  Trying to move closer to the ten thousand mark compared to the twenty six thousand mark is a great place to start in the fight against loan debts (Mitchell).

The negative effects of the overwhelming amount of debt could cause crippling effects on our country if we do not take a definitive step towards improving the situation.  All things considered, the conclusion can be drawn that while a small amount of debt may be a "good" thing, college debt is one of the largest problems and epidemics facing our country.  No matter what way you look at the situation, it is a fact that student debt is causing some resounding crippling effects on the country as a whole.  This is without even mentioning the individual burden that people are left to deal with as well.  If people were simply more educated about the situation, a large progression would be made to better the situation debt has caused.

