Student loan debt is one of the biggest problems in the United States at the moment. There are 1.6 trillion dollars of debt in the country and 44 million are in debt. That's an average of $36,364 per person. College debt only started in the 80s and it grew very rapidly when President Ronald Reagan made cuts to social programs. Today, student loan debts are persistent because of lack of funding from the state governments.
Student loan debt is a hot topic among the 2020 political candidates. College debt in America is so high because of a chain reaction starting with a lack of funding from state governments. Student loan debt started in the early 1980s when President Ronald Reagan started making budget cuts to social programs. College grants dropped significantly, and need was reintroduced as part of eligibility for guaranteed loans. A 5% fee was imposed on borrowers and increases in the cost of tuition started to accelerate. People could say that loan volumes were up in the 1980s, so the budgetary assault couldn’t have been that detrimental. But really, this loan volume increase was coming in at rates slower than between 1978 and 1981. College was becoming more of a necessity in the 80s to get a good paying job, so some people absolutely needed the loans, thus making loan volumes rise.
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Today, there are many things keeping student loan debt high. These reasons being a demand for higher education and an increase in financial aid for people of a poorer status. But mainly it is a lack of funding from state governments that start a chain reaction of student loan debt. The lack of funding causes college rates and tuition to go up which makes people need loans which causes debt. People can say that college interest rates went down in the 2019-2020 school year by .1%. But the cost of higher education is very inflated so this barely makes a dent in the tuition. The 2020 presidential candidates are talking about eliminating student loan debt completely. Bernie Sanders and Elizabeth Warren both have their own unique plans for getting rid of the 1.6 trillion dollar deficit. Although Warren has now dropped out of the race, her plan included people with incomes of less than $100,000 would get $50,000 of their student debt pardoned. “People who earn between $100,000 and $250,000 would be eligible for forgiveness on a scale” (Annie Nova ‘Big changes could be in store for student loan borrowers’ CNBC.com). The original $50,000 in debt relief drops by $1 for every $3 a person earns over $100,000. “And those who earn more than $250,000 would be ineligible for debt forgiveness” (Annie Nova ‘Big changes could be in store for student loan borrowers’ CNBC.com). Sanders’s plan was to just wipe out the 1.6 trillion dollar debt. Others are saying that without paying for higher education, the college is not going to make money. This is incorrect because the government would fund college. Free education has worked in numerous other countries like Norway, France, Iceland, Finland, and Sweden.
Overall, student loan debt is a major problem in the United States. The concept of it started in the 80s when social programs were cut by President Ronald Reagan. Now, the debts are getting larger because colleges weren’t getting enough funding, so tuition prices went up. Hopefully, in the future, other presidential candidates could end student loan debt. This is a significant topic because higher education is a major part of life today in the United States. Maybe we as a country can make college free like other European countries.
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