I’m not American so the concept of a college loan is very alien to me. In my country we either pay for college tuition up front, apply for financial aid if our grades are high enough and your family is needy enough, or you don’t go at all. And In some public universities, tuition is either wholly or partially government subsidized.
I’ve heard of Americans complaining how they’ve got thousands of dollars in college debt and in some cases they take your whole adult life to pay off. So why are college loans even a thing in the US and what happens when you’re not able to pay it off?
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Today’s student loan program started back in the 1970s. Before that, to go to college in the US you generally either had to be rich, or smart. Not *rich* rich, but relatively well off. Most people didn’t go to college. If you were smart and poor, you could get a job and go to night school, live really frugally for several years until you got your degree, and then get a much better job making more money.
However, the US government wanted to encourage education, and they thought it would be easier if the smart but poor kids didn’t have to work full time just to pay for tuition and books. So they got the bright idea to create federally-backed loans. Loan the kid money, he’ll get his degree, and then with the great job he gets after graduation, he can pay it back.
This worked for a few decades, but starting in the 90s it started to spiral out of control. But nobody recognized the problems, and nobody made any effort to stop it or fix it. Now we do recognize what went wrong, but any fix you suggest is going to be extremely politically unpopular.
Here are the big problems:
1) In the 50s, 60s, 70s, and 80s, a college degree was a big deal. Most people didn’t have them, and if you had one you could get a much better (and higher paying) job. Today, college degrees are very very common, and having one doesn’t really mean much.
2) Colleges started seeing students as big sources of revenue. It used to be that if you had terrible grades, you would get kicked out. But today they don’t want to kick out a guy paying $50,000 a year in tuition. Colleges try to draw as many students as possible, including a bunch of people who aren’t really smart enough to be in college. More students = more money for the school.
3) To attract as many students as possible, colleges went on spending sprees, turning campuses into stunningly beautiful resorts. The same with student housing. This drives up costs a lot. Texas Tech University built a water park to attract students to their school ( [https://www.aquaticsintl.com/awards/texas-tech-university-student-leisure-pool_o](https://www.aquaticsintl.com/awards/texas-tech-university-student-leisure-pool_o) ). They have also added a bunch of fairly useless fields that you can get a degree in. This further dilutes the value of a college degree.
4) Since the 90s, colleges have more than tripled the number of administrators employed there. Because I guess they’ve gotta spend that money somewhere.
5) Because people realized tuition prices were going up fast, and mostly useless degrees seemed to be growing, in 2005 Congress changed the law so you couldn’t get rid of student loans in bankruptcy. They thought this would make people be responsible for their own decisions. What it actually did was tell the colleges and the banks that they could loan *as much money as possible* and the kid would have to pay it off eventually. Tuition across the country skyrocketed after that.
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Fixing this is tricky, because neither of our political parties are really in a good spot to change it.
Colleges (particularly the most elite and expensive colleges) are overwhelmingly run by the Democratic Party, and the Democrats *love* higher education. Campuses are super liberal, and something like 95% of all college professors are Democrats. But they are also the ones who jacked up the tuition rates, and it’s generally their voters who are the ones stuck in massive debt.
Republicans are less affected, because they are less likely to go to college (and if they do, it’s more likely to be at a cheaper state school). And since Republicans tend to be older, their voters probably went to college before the huge price hike got out of control. So part of the Republican Party is chuckling at Democrat voters suffering under huge loans (who could have known that taking out $200,000 in loans to pay for a Gender Studies degree would be a bad idea?). But if they can force college tuition rates down a lot, that’s a huge chunk of money that would no longer be going to their political rivals.
So *somebody* will have to fix the problem eventually. Costs can’t spiral out of control for too much longer without major major problems. But neither party really has a good strategy for fixing it.
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