The majority of American college students graduate with a significant amount of debt due to student loans(~66% of students in public colleges graduate with student loan debt). Students loans aren’t just a problem for college students though, they impact the entire economy. With student loans and debt, many college graduates don’t have the funds they need to start new businesses that are potentially revolutionary. The major problem with a lack of entrepreneurship is that it has a major impact on the job market. Around sixty percent of jobs revolve around small business and their demand for labor, which means if the number of small businesses decreases unemployment will increase. A large percentage of the population have college degrees meaning they no longer have the edge they need toget a well paying job soon after graduation.
Home ownership and the real estate market are also directly impacted by student debt. Students can no longer afford to buy houses meaning an entire generation won’t be able to enter the market until later in life. At the moment there is roughly one point one trillion dollars in student debt and the average per student is thirty thousand dollars. It can take them several years to get a stable enough job to begin paying off their debt. Students no longer focus on getting advanced degrees needed for high paying jobs because it would simply cost too much. There has been a sharp increase in the past several years of students choosing career paths in low paying public interest jobs. While public interest jobs are necessary for our economy to function, there should still be interest in other fields.
So how do we solve the student debt crisis? A popular s
olution would be to simply forgive student debt altogether, and many believe this would cause economic growth. A major factor in the debate over forgiveness is that many believe it is unfair to those who have just finished paying off their student loans. However we can’t cater to everyone, while some people won’t directly be benefited, a stronger economy is good for everyone. Forgiving all student debt may not be the only solution. Another popular opinion is to create policies so that seventy to eighty percent of loans would be forgiven, and the government could forgive student debt to graduates who choose career paths in government.
I believe we should take advantage of student debt to stimulate growth in certain, undeveloped or understaffed fields. Graduates who go into certain fields(like government work) could get exemptions they need, but that would skew growth to favor select professions. Supply of labor would be in surplus, while the demand will only decrease. For those who don’t want choose exempt career paths, alternative policies or opportunities could be implemented. These policies could focus on those with lower incomes and thus allowing them to focus on developing their own lives. This solution would benefit individuals, underdeveloped/understaffed fields, and society as a whole.
Sources:
21st Century Citizenship 