What happened in 2008 for the mounting student loan debt to be called a “crisis”? According to a recent article published by Forbes, the term “crisis” was used shortly after the onset of the Great Recession of 2008. This, however, seemed to be just the beginning. Since then, colleges sustain the crisis with tuition cost in inflation and our current politicians and presidential candidates have been adding fuel to the fire.
Availability of Federal Money Leads to High Tuition
According to the Forbes article, a 2015 study found that the ease of and availability of federal money for higher education promotes higher tuition and fees attributing to $1.3 trillion of student debt to inflated tuition. In my opinion, this is taking advantage of the system and not helping young people with their education. Another issue pointed out that researchers and analysts believe has contributed to the student debt “crisis” is a decrease, since the 1980’s, in vocational training in high school. This has created a shortage of blue collar or technical type employees, leaving our job market in need of skilled technicians and “middle skill” workers.
Finally, all of the political talk about student loan forgiveness seems to be inviting people to borrow more money in hopes of the politicians making good on some of their promises. The ultimate promise of student loan forgiveness comes from Bernie Sanders. He says that college should be free! I’m not sure about that, but he does make one good point about student loans saying that they have “outrageously high interest rates.” I would agree with that statement. Hilary Clinton has put blame for the “crisis” on for profit colleges stating that the schools “…take all this money and put all these young people and their families into debt…” Senator Rubio has advocated for the “middle skilled” workers, saying we need more vocational schools for kids to learn skills while in high school so that they can become employed upon graduation.
I am not sure what the answer is to the problem but, hopefully, the politicians, colleges and borrowers can get nearer to a resolution since this issue is on the forefront of most political agendas during this election year. The attorneys here at Bond and Botes are familiar with these student loan issues and may have some options to help you. Please contact our office nearest you if you are feeling overwhelmed with student loan debt.