Student loans have dominated a large part of the discussion in the 2020 US presidential election, which will take place in November.
Democratic presidential candidates Elizabeth Warren and Bernie Sanders have promised to relieve Americans of their US$1.6 trillion student debt if they are elected President.
In today’s competitive climate, a degree and postgraduate qualification have become a necessity in some working environments.
But student loan debt has become a national crisis that is putting students into debt longer, and preventing them from achieving major life milestones such as buying a house or getting married.
Critics of Warren and Sanders argue that both senators are not addressing the real issue – ie. the escalating costs of higher education – and are using their student loan forgiveness plan as a carrot to win support from voters.
While both politicians’ plans are highly appealing to the estimated 45 million borrowers in the US, opponents argue that there are many repercussions to student loan cancellation.
Are students complacent about their student loan debt?
On The Citizens’ Voice, Michael A MacDowell, president emeritus of Misericordia University and director of the Calvin K Kazanjian Economics Foundation, said among the contributing reasons to the growing student loan debt is the prevailing attitudes among students and their parents that there will be a way to wiggle out of repaying the government money owed.
“The thinking among some is that if we just wait long enough, we won’t have to pay. Our loans will be forgiven,” he wrote.
Student attitude towards completing college on time also affects their debt levels, with extra semesters in college contributing to the added cost of their education.
“Under politically charged policy proposals which would allow for disbursement of student debt via the bankruptcy courts, the federal government is encouraging students to do what it does so well, kick the repayment can down the road. Ironically, it is today’s students who will pay for this fiscal irresponsibility through future higher taxes needed to cover today’s excessive spending,” said MacDowell.
He recommends prospective college students to do “some harder number-crunching” and look at the projected annual income for employees in fields for which they are preparing, in addition to working towards finishing college in four years.
On the federal level, he said it is essential that “we stop encouraging student loan defaults by changing the rules by removing, or promising to remove, the responsibility for repayment of student loans”.
“By doing that the government is modelling behavior many abhor, namely not taking responsibility for poor decisions made in the past,” he said.