It is a well-known fact that just about every student who desires to pursue a college education must look into taking out loans in order to pay for their overwhelming tuitions. It is also known that taking out said loans comes with many drawbacks. Virtually every student who takes one out leaves college with massive debt; a debt that will take them years and lots of hard work to pay off. So, the question is whether these loans are worth it in the end? Sure, they allow for less fortunate students to receive a higher education, but is the payoff equal to the debt that those students will be put in? Many post-graduates are not able to do exactly what they intended to do after schooling, simply because they have to work to pay off their debts before they can. In retrospect, yes, there is more opportunity for higher education for a larger population, and many general benefits, but what is that debt worth if students still cannot pursue their intended careers after college because of it? Although student loans allow for vast opportunity, the impact they have on the lives of those who utilize them can in fact be more detrimental than helpful if they are not addressed and corrected in the near future.

In order to understand student loans, it is important to know why they are implemented in the first place. Whether it is obvious or not, there are actually several benefits that come with the use of the student loan system. First off, and most importantly, they create a larger margin of opportunity for more people. So many bright children are unable to seek out their potential simply because they come from an unfortunate financial background. With the help of student loans, these people are able to attend college and pursue the careers that they want to (Fossey). This also means that more people will be receiving a higher education and in turn, there will be a greater amount of educated people in today’s overall society. This is in the best interest of the nation, and allows for the furthering of intelligence of the entire population. 

There are several other fiscal benefits that come with student loans that are actually positive for those who take them out. One of these is that the interest that has to be paid on loans typically is deductible (Freeman). This means that since the interest is deducted from their annual income, it has the potential to reduce someone’s overall annual tax payments, because taxes are based off of that income. There are also many ways to help aid individuals in repaying their loans after college. For one, students do not have to start paying off their loans during their years of schooling, or for six months after they finish because of a grace period (Freeman). This allows for sufficient time for the student to adjust to being part of society and to get their feet on the ground before they have to begin making payments. Additionally, there are ways for certain debt situations to be relieved or forgiven. This depends on many different factors such as the career status of the post graduate, and the time frame of each individual’s loan plan (Freeman). For those who end up with lower paying jobs, or reach a certain amount of time when their debts are still not payed off, there is the possibility of the debt being relieved. Lastly, student loans have the potential to actually help students’ credit. This is the case if students borrow as much as they are able to pay back showing that they are financially responsible (Freeman). Being able to establish good credit early on is very beneficial, and could potentially give the student a one-up in their future. As helpful as student loans may seem, many fine details are often overlooked throughout the process. Many times, students’ entire career paths are skewed because they have to compensate for issues that arise from taking out student loans.

Most of the time, people focus on the repercussions that happen after college for students when they have to deal with their debt, but what often goes unnoticed is that the negative effects actually begin before the student even attends a university. There are several factors that students must take into consideration when discussing where they plan to attend college. Some of these include how far they plan on going from home, what programs each university has that suit their desired majors, and the general feel of the campus. For certain less fortunate students, these factors are limited solely based on how much they are capable of paying for their education. It has been observed that “most students do not begin to think seriously about how they will pay for college until their sophomore year of high school; however, research also suggests that students have typically formulated their educational aspirations by the 9th or 10th grade” (Fossey). This means that for certain students, they may not be able to attend their desired college or pursue their intended career paths simply because they can only take out so many student loans to pay for it without condemning themselves to debt for the rest of their lives. This may force a student to attend a community college or one that does not fit their major solely based on financial capability. Given this fact, it can be said that student loans are basically a trap. Institutions may be giving students enough money to receive their education, but based on their starting financial status, it may take them years to pay them off, forcing them to delay pursuing their intended career in order to do so.

Not only do student loans sometimes change students’ minds before they come to college, but sometimes affect what they are capable of doing while they are in the midst of attending. Typically, when a student knows the career they want to pursue in their life, they become set on their goal. Imagine the devastation when someone takes out a student loan in order to afford their education, only to have to change their major because they will not be able to afford paying it off in the future. For example, a history major may come out at graduation with a debt of around $50,547, while an accounting major may end up with $16,000 (Donhardt). For certain individuals, it may be necessary to switch from one major to another just because of this fact, but just because a major is cheaper does not mean that it will be easier or more fitting to a student. In fact, certain more difficult majors end up with less debt than easier or more general ones. A biology major has the potential to end up with less debt than a liberal studies major, but someone who is more inclined towards English and history subjects is probably not capable of being a science major, and vice versa (Donhardt).  This creates an issue for students directly, but the whole economy indirectly. If certain majors are less attainable for some people, there will be a less amount of people in that major, creating a demand for it that would get increasingly harder to fill. Even though some people make changes during their college careers because of imminent debt, unfortunately not everyone plans ahead.

More often than not, students do not pay attention to details or really think about the long term effects of their debt. Many people will go to school and take out loans only to have them accumulate and later sneak up on them, hindering their path to success. It is speculated that “most students do not begin to think seriously about how they will pay for college until their

sophomore year of high school; however, research also suggests that students have typically formulated their educational aspirations by the 9th or 10th grade” (Fossey). This is a dangerous reality for many students. They will attend college and take out loans before even considering how they will pay them off in the long run. This can lead to many unexpected road blocks later in a student’s life that may alter their ability to pursue their intended careers. Unfortunately, it is often the case that the low income families which rely on student loans that most actually wind up with more debt and delayed success than those who are financially apt enough to afford the costs of postsecondary education (Fossey). For a student who comes from a family that may be struggling fiscally, this reality means that they may have to work another job outside of their career range in order to aid in paying off the loans they accumulated during their schooling. Sub sequentially, this means that for that person, the financial success in which they were aiming for when they pursued higher education will be delayed because of the very thing that allowed them to receive their education. In a sense, the system of student loans in a sort of trap, creating a downward spiral for its recipients in which they are stuck paying off their loans instead of seeking out jobs for their intended careers. Scaling to long-term, an issue arises for the financial stability and future plans of these individuals. 

With the extended commitment that these loans force students to make, it is likely that they will be unable to make large financial decisions such as buying a home or starting a family until they are able to pay off their debts and become financially ready for them. This is all attributed to the harsh reality that many students coming out of college have debts to pay that exceed their annual income, making it next to impossible to be successful immediately after schooling (Hershbein). Due to this fact, students typically are caught in a game of catch-up; always working hard to pay off their loans but still being behind no matter what they do. In a National Public Radio podcast called “'I'm A Student-Debt Slave.' How'd We Get Here?”, an interviewee talks about the situation of a post-graduate and student loan user named Jessie Suren. Her story is extremely ironic, and actually very common. She came from a background of poverty, and borrowed a significant amount in order to attend college, but afterwards was thrown into the real world with no job and stifling debt, and was forced to work several low level jobs just to be able to make her payments. This reality in which so many Americans are faced with is saddening. Not only does it affect millions of individuals financially, but it also deters them from chasing after their aspirations in life.

It is important to know how student loans work and who controls them in order for those who need them to be able to use them wisley. When considering student loans, there are two different types. The first option are federal loans, which are based off of a students allotted financial aid. In order to apply for this kind of loan, students are required to complete their Free Application for Federal Student Aid (FAFSA) in their senior year of high school, and choose a plan for financial aid that best suits their status (BigFuture). Depending on each several factors of a family’s situation, more or less financial aid may be awarded, meaning that those who can show that they need more will be able to receive it. These loans are awarded by the government, and are typically subsidized, meaning that the government will pay for the interest on the loan while the student is receiving their education (BigFuture). This allows for students to save money while in college so that they will be prepared to pay these interest rates when they are out. Unfortunately, families are only awarded so much money in federal loans. If the amount they receive is not sufficient enough to help pay for their education, private loans may need to be considered. 

Private loans are typically taken out as a last resort option for students. The difference between private and federal loans is that typically, private loans cost higher in interest than federal loans, and have less flexible options for repayment and protection in the event of unfortunate circumstances (BigFuture). They may not be subsidized like federal loans, and could have very harsh and unforgiving requirements for payment. This is extremely ironic, because usually the families who need to take out the most will need to utilize private loans, which are the kind that are even harder to pay off in the end. For those who need to use this option, several more years of paying debts and a lot harder work is necessary, but for others, it means postsecondary education may not even be an option. Private loans are taken from other institutions, banks or some private foundations, but in order to qualify for them, good credit and often a cosigner are required (BigFuture). For those unfortunate enough to be underqualified for these loans, which are typically those who need them the most, they will either have to find a less expensive university, or not attend one at all. This is exactly the issue with the entire system of student loans. The whole purpose of them is to help more people attend college, but the very people who need to be helped the most have the hardest time receiving it.

Nowadays, the more prominent goal of student loans is no longer for the success of more individuals, but for the benefit of the institutions that deal with the distribution of them. The cost of college education has obviously been increasing, and with that both the universities themselves and the private loan companies benefit. The institutions earn more with higher tuitions, and loan companies profit by collecting interest on loans that they award to students in order to pay for said higher tuitions. Although these institutions are largely profiting from this system, others are not, and with so many post-graduates and students across the nation in the same debt situation, the economy itself begins to suffer. It all begins with the issue that many students are ill informed on how to wisely borrow loan money. Many will just take what they can get before reviewing their payment options or comparing different plans to see which is most beneficial or realistic. In the case of the millennials, “45% do not know how much of their annual salary they spend on their loans, and more than one-third don't even know what their interest rate is” (Adamczyk). This means that people are borrowing more than they need without even realizing it, and suffering the consequences later in life that they haven’t even considered. In some cases, institutions will take advantage of this fact for their own benefit. Many students pay way more than they need to, but in these certain cases, it is potentially possible to receive a student loan discharge if the individual can prove that they have been frauded by an institution (Mayotte). This is not always likely to happen, but the issue of overpaying loans or being scammed on them starts with making sure those who take out loans know how to do so.

The education of students and their families on the dynamics of student loans is by far the most effective way to ensure that they do not end up stuck in a situation in which they cannot afford to pay off their loans, or pay for their education at all. This is important because “borrowing money to pay for college can be a [very] sensible choice, as long as [those who do] do it wisely” (BigFuture). However, in addition to better informing students on how loans work, there are various other measures that can be taken in order to help fix the national issue of student loan debt. Firstly, and most importantly, colleges and institutions need to accept and address that there in an issue, and must be willing to work to fix it. The most obvious fix would be to lower the cost of tuition, but it is not that simple. It is true that reducing the cost of education for the student by either a lower tuition or more granting more financial aid will help the overall amount of debt they will accumulate, but “no single factor will reduce student debt more than reducing the time it takes for a student to earn a degree” (Eisler). This is on the universities themselves; if they provide sufficient academic advising, and put focus and effort into making sure student are on top of their credits and on track for their majors, the simply factor of time at the university will help decrease the amount of loan debt the student will be put in. It’s simple: the fewer years of schooling, the less one will have to pay. As long as students are willing to utilize the resources they are given to effectively take out and manage their student loans, and institutions are willing to cooperate in helping them do so, the issue of student loan debt will eventually begin to subside.

It is imperative that this national problem is recognized and that those who are involved are willing to fix it in order to get back to opening up opportunities for higher education, instead of putting a damper on the futures of students. Overall, “student debt is not any one person or group’s problem. Rather, it is a problem for everyone in higher education and in society, and one that we must all help solve” (Eisler). The process of correcting the student loan debt system will not be an easy one. It will take commitment from all of those involved, both to raise awareness on the topic and to provide resources which can aid those who need informing. However, with the long-term dedication to solving this issue, everyone involved will also benefit. Brilliant students who have the misfortune of coming from low-income families will be able to live out their potential, a larger population overall will be more educated, and with lower debt rates, these students will sooner be able to contribute to society as a whole after graduation. In the long-term, this mean higher success for the entire nation, but by addressing and commitment to correct the student loan debt system, the success has already begun.
