Bella Guerrero

House 3, Cohort 2

Prof. Clarke

11-14-21

Student loans are the modern-day equivalent to selling your soul to the devil, and it's time for an exorcism. In this day in age, a college degree is becoming less of an academic privilege and more of a societal requirement. With this change in supply and demand, college tuition prices are higher than they have ever been before. So, students today are thrown full force into a ring of hell we call student loans. Student loans are extortionate and drastically affect a student’s future financial stability. With no other option, what is a student to do?

Today’s job climate is much different than it was 20 years ago. Society has progressed into its technological era, leaving us to run with the progress. As we evolve so must our education. A high school diploma just isn’t enough anymore, more jobs are requiring at least some college experience or an associate’s degree. As a former high school student, I can tell you from experience that from the 1st day you walk through the threshold of high school you are ambushed with the idea that college is your only option. There wasn’t a day that went by where teachers and administration didn’t tell you that everything you do now will affect where and if you go to college. As a hormonal teen, this filled me with anxiety. How could I be successful if I didn’t go to college? This question plagued my mind and left me to think that college is the only option. “...we have failed to pay attention to and invest in opportunities for young people who are not on a path to go to four years of college.” (Lennon) Mr.Lennon, ahead at JP morgan chase, agrees that college isn’t an option for everyone, But today’s job market does not care. For young

high school graduates, the unemployment rate is disturbingly high: 33%. So true for a high school to have a road to success they must go to college. You would think now that college is a necessity it would be affordable for every student. You would be wrong.. Very wrong.

College tuition prices have skyrocketed in the last 20 years, leaving many students unable to pay for college. Today the average cost of a 4-year university is somewhere between $30,000 - $50,000 per school year. $200,000, is what universities are asking teens to pay for an education that is mandatory in today’s society. $200,000, money that no 18-year-old has just lying around. $200,000, the price of a very nice home. Universities know this, they know that this is a lifetime investment; an investment in your future. So they offer what seems to be a saving grace: Student loans. There are different types of student loans, FASA which is based on your parent’s financial status. Direct unsubsidized loans, which are not based on financial need and have recurring interest rates. PLUS loans, which are loans that are directed to the parent and not the student. Then finally there are Direct Consolidation Loans, these combine all of the loans you are eligible for into one big super loan. All of these have lifetime effects, on your future financial stability. One, they drastically affect your credit score which is a determining factor when you’re buying a house, a car, or any other big purchase. Two, Student loans are a special type of loan, normally when you take out a loan from a bank and you can’t pay them back you can claim bankruptcy. This means that your future financials are pretty much nonexistent but you no longer have the burden of paying out of your debt. But students loans are the exception, once you’re in, you’re in. Like a sketchy mafia gang you are in for life, you must pay back the big banks. This is pulling students into a lifelong commitment to paying off their debt. You would think that because these loans are marketed to teens with no real-world experience they would be explanatory and user friendly. Wrong... Again. For former student Holly Polly, her student loans took over her life.

When holly was 18 she took out a student loan for $80,000, seeming reasonable. Fast-forward 10 years later, Holly was making payments totaling upwards of $110,00 towards her debt. When checking her remaining total she still owed $76,000. How? HOW? This is proof that the system of student loans is predatory, it leaves young professionals trapped in a lifetime of debt.

Though this crisis is a common phenomenon among students, the burden seems to fall on certain shoulders. Shoulders of color. Colored parents are facing the problem of a racial pay gap that infects our society. According to the​ State of Working America (SWA), wages are slowly improving with the economy, but wage inequality is growing and wage gaps have worsened. There is a “33.4 percent wage gap for the highest-wage workers which is explained in part by occupational segregation...” (Gould) Occupational segregation is particularly devastating for black women, who face a history of deep-seated racial and gender discrimination. These numbers prove that there is a gap among employees of color, leaving POC at a disadvantage. In Gould’s article, she states that with higher education POC have a higher chance of closing this wage gap, but with the tuition being at its highest and loans leading to a student’s downfall how can they get a leg up. Thus leading to increased inequality of educational access.

The average student cannot afford a 4-year university without help from a loan. The average parent (more so parents of color) cannot seem to afford to cover their child’s tuition. And the loans lent out to students and parents keep both in a neverending cycle of paying for their freedom. Exactly how do student loans affect your future? Though the facts seem grim there are positives to your student loans. Your loans are establishing your line of credit. If you pay each payment on time you can boost your credit score. So when you are older, buying a house or a car with a loan can be easier. The bank knows how responsible you are, giving you a higher chance of receiving a loan. Although frequently missing payment can drastically lower your credit score

leaving you with no one who will give you a loan. Another positive is the fact that student loans are tax deductibles, up to $2,500. This means that the money you put towards your loans will not be taxed at the end of the year. So with some serious diligence, the right student loan can be quite helpful.

College is intimidating. You finally get a sense of freedom and can become a grown human being; But this comes at a cost, a pretty hefty cost. Most parents move heaven and hell to have their kid attend college. Though it is now a societal requirement to have college experience, actually attending college is becoming more and more unobtainable. Loans give you the opportunity and in some ways are beneficial but like most things that were once good they are now corrupt. Most loans have hidden fees and contingencies that can ruin a student’s life and cost them thousands of dollars. People are profiting off students’ ignorance and it’s time for it to end. Let’s educate the youth on safe loans to take out, not throw them in with the sharks. Give them a fighting chance at a better life, so that they can create a better world.

Work Cited:

Cohen, Patricia. “It's a Tough Job Market for the Young Without College Degrees.” The New York Times, The New York Times, 10 May 2016, https://www.nytimes.com/2016/05/11/business/economy/its-a-tough-job-market-for-the-young-w ithout-college-degrees.html.

G, Chandni. “Tiktok User Breaks down about Student Loan in Viral Video, Highlights the Need for Free Education.” Https://Scoop.upworthy.com, Upworthy, 2 Sept. 2020, https://scoop.upworthy.com/tik-tok-user-breaks-down-about-student-loan-in-viral-video-highligh ts-need-for-free-education.

Gould, Elise. “Stark Black–White Divide in Wages Is Widening Further .” Economic Policy Institute, 2019, https://www.epi.org/blog/stark-black-white-divide-in-wages-is-widening-further/.

Hess, Abigail. “How Student Debt Became a $1.6 Trillion Crisis.” CNBC, CNBC, 12 June 2020, https://www.cnbc.com/2020/06/12/how-student-debt-became-a-1point6-trillion-crisis.html.

Llc, Earnest Operations. “How Do Student Loans Affect Your Taxes?: Earnest.” Earnest Blog - Money Advice for Young Professionals, EARNEST OPERATIONS LLC, 19 July 2021, https://www.earnest.com/blog/student-loan-interest-deduction/.