Living and Learning Under Crushing Student Loan Debt

By Ania Hubbard
Staff Writer

College students are in a major loan crisis today because of the thousands of dollars they’ve had to borrow to pay for school.

Today’s crisis largely stems from a repeal or reduction in accountability measures between 1998 and 2006, and expansions in federal aid and loan limits in the mid-2000s, according to student finance experts. Some 43 million students have borrowed more than $1.6 trillion to cover college expenses like tuition, housing, food, transportation, books and supplies, according to the most recent figures available.

The student loan crisis took center stage during the 2020 presidential election. Former Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) was attacked by many when she announced that, if elected, she would fight for free college and the cancellation of up to $50,000 in student loan debt for 42 million Americans making less than $100,000 per year.

Even so, it is important for American college students to save and budget their scarce resources, experts said, especially when they graduate because failure to do so can cause them to default on their loans.

Many students default on their loans because they have difficulty finding a high-paying job or get laid off from their current job or miss payments, according student finance analysts. If student loan goes into default it can result in a low credit score, garnished income, loss of a professional and tax refunds could be withheld for several years. To avoid default, experts encourage students to get on an income-based, graduated repayment plan.

Although a college degree is important, earning one is more expensive than ever before.