What are we going to do about student loans?

The more I see, the less sense it makes


In a few short years, our son will be going to college. My wife and I are now facing a sobering reality: it will likely require student loans to get him through.  We’ve been strategizing and our current plan is, if loans are needed, they will be taken out under his name and we’ll help with paying them back.  Nonetheless, the fact that he might be facing a serious amount of debt instills in me fear and anger, not to mention a slight sense of personal failure on my part.

Don’t get me wrong.  I think kids should be responsible for helping to finance part of their higher education.  By the time I was 20, I became responsible for paying for my own schooling, rent, groceries, etc.  After I started paying for my own way, I took things a lot more seriously.

But, in the late 80’s/early 90’s, with scholarships and a Pell grant, the cost of going to THE Ohio State University wasn’t out of reach for a kid from a poor neighborhood.  In the end, I walked away with only about $13,000 in student loans.  Even though it felt like a lot of money then, I had it paid off in a few short years.

I have friends and co-workers with kids in college and the stories they share with me about loans scare the hell out of me.  What I’ve read and researched on my own does little to calm my concerns.  Why?  Well, here’s my take on it.  Perhaps you might agree.

It appears that student loans have become even more of a commodity and, as a result, the industry looks like the housing market did about 15 years ago.  A lot of money is getting handed out to both students and to parents who are taking out loans on their child’s behalf.  On the other end, colleges and universities, spurred on by the free flow of this money, see little incentive to stop raising tuition and fees year-after-year.  So, the schools raise costs, the lenders lend more money and, in the middle, kids and parents get squeezed.

According to the The Institute for College Access and Success (TICAS), 69% of college students graduate with some type of debt. In short, they are getting a diploma in one hand and a huge bill in the other.  TICAS estimated that, in 2014, they average student loan debt of a borrower was $28,950.

Granted, there is some good news on the job front.  It appears that, last year, the average salary of a college graduate rose to a little over $50,000, an increase of 5.2% over the previous year.  Still, having a large amount of debt to manage can prove challenging for those just starting out in their post-college lives.

I say all this to raise a serious question.  What are we going to do about student loan debt?  It’s clear that lenders and schools aren’t going to make changes absent our pushback.  So, it’s up to us to demand some relief.

Professor Sajay Samuel, of Penn State University’s Smeal College of Business, recently gave a Ted Talk on the issue of student debt and came up with a proposal that, though I’ve heard before, bears repeating and consideration: tie tuition costs to the expected earnings for the degree offered.  Check out the video below.

This may not be THE answer but, it’s a start.  It’s now up to the rest of us concerned with this issue to lend our voices to the call to reform the student loan industry.

Written by JP Smith

A self-proclaimed "technologist...with attitude", I'm a forty-something husband, father and IT professional/enthusiast. I believe that learning and growth are lifelong endeavors.