The Scary Truth about Student Loans

Hello Witches and Warlocks! 🧙‍♀️👻Happy Halloween!!🎃 It’s Madelyn writing to you on this very spooky day. To stay in theme with the spirit of Halloween we will be learning about something truly terrifying…student loans. *Blood Curdling Screams*

Did you know the average 35 year old in the USA has about $42,600 in student loan debt?! By the time people are done paying their loans off, they will have paid 280% more of what they had initially borrowed! SO! How the F did we get here? I’ll try to keep it short and simple…but it’s a whole lotta f*ck sh!t… come along… If YoU dArE!!!!! *Ghoulish Laughter*

Monarch Menu

• The Historical Shift: From ‘Do Gooder’ to Greedy Institutions

• Government’s Role in the Student Loan Crisis

• The Ongoing Burden: Student Loan Debt’s Far-reaching Consequences

• Yikes

🧑‍⚕️👉🥳The Historical Shift

First we will touch base on the profound transformation of higher education in the United States. What began as a noble endeavor, where individuals pursued knowledge and professions that served society, has now shifted towards profit-oriented institutions. In the early years, the idea of free tuition was prevalent, and universities relied on donations from wealthier benefactors to support their mission. However, as time went on, universities increasingly shifted their focus to helping individuals gain wealth, changing the very essence of their purpose. This transition set the stage for the rising costs of education and the ensuing student loan crisis that plagues many today.

Break it down: ‘Do Gooders’ - want to go to college to become helpful members of society. *Shift Happens* Highschool students are sold the “American Dream” and social aspects of universities. The reasons for attending college are now, personal gain, socializing and no longer for the greater good. ( FOR MANY, NOT ALL!!!)

This shift made the wealthy people that were donating their own money feel like they should not be the ones paying for students tuition and it should be left up to them and their families. This worked for many people that were attending college because they were wealthy white men, but what about for people who didn’t come from money, women or people of color? Student. Loans.

🤑🤑Government’s Role in the Student Loan Crisis

Now, lets look into the significant role played by the government in the ongoing student loan crisis. Government policies and legislative decisions have had a profound impact on the state of higher education and the accumulation of student debt. Throughout history, actions like the National Defense Education Act of 1958 and the Higher Education Act of 1965 were intended to make education accessible to all income groups, initially with minimal interest. However, as time progressed, government involvement shifted, and initiatives like the Free Application for Federal Student Aid (FAFSA) and the Direct Loans program came into play. The government's evolving approach to education financing has played a pivotal role in shaping the student loan landscape.

Break it down: Over time, the history of student loans in the U.S. has seen significant changes. It started with the idea that these students were doing us all a favor; therefore the people who could fund these endeavors would pay because they saw it as a greater good. It then changed to the students should pay for their own education (because their reasonings for attending college changed), but that notion was initially rejected. Various events like the Great Depression and the competitive space race with the Soviet Union led to government involvement in education financing.

The National Defense Education Act of 1958 introduced federal student loans, scholarships, and grants due to the growing need for educated individuals. (The US wanted smarty pants to beat the Russians in the race to the moon.) The Higher Education Act of 1965 aimed to make education accessible to people of all income levels, but it introduced interest on loans. As more students attended college and universities competed for prestige, tuition costs continued to rise.

Sallie Mae, not a cute little girl jumping rope, singing skipping songs, but a government-sponsored enterprise, complicated the system as banks borrowed money from the U.S. Treasury to provide student loans. This led to banks issuing more loans, creating a potential crisis. Universities lured high school students with the promise of the "American Dream" and kept increasing tuition.

In the 1980s, reduced state funding and tax cuts led to a decrease in student assistance. The federal government shifted away from grants and relied more on student loans. The introduction of the Free Application for Federal Student Aid (FAFSA) and the 1993 Student Loan Reform Act brought changes that resulted in higher interest rates and increased student debt.

These changes in education financing were influenced by a variety of factors, including economic challenges, government policies, and the involvement of financial institutions.

😰The Ongoing Burden: Student Loan Debt's Far-reaching Consequences

The repercussions of student loans extend far beyond individual borrowers, affecting both people and the broader economy. On a personal level, many graduates find themselves delayed in achieving key life milestones such as buying a home, getting married, starting a family, or saving for retirement. The burden of student debt can hinder financial stability and limit choices, often forcing individuals to prioritize loan repayments over these important life goals. Moreover, the weight of student debt can have profound economic implications. It can restrict consumer spending, reduce economic mobility, and even impact the housing market as potential homebuyers grapple with their loan obligations. Thus, the consequences of student loans reach beyond individuals, influencing society and the overall financial landscape.

The author, Alan Collinge, wrote a book called "The Student Loan Scam." He initially thought student loans were a necessary evil to achieve the American Dream, but his personal experience with loans from Sallie Mae (that b!tch) left him in a difficult situation. When he couldn't find a job, he ended up sleeping on a friend's couch. He criticized Sallie Mae for misleading practices, saying it harmed his credit and created various problems. Student loans are tough because you can't declare bankruptcy to start over; you're stuck with them. Collinge felt that despite working hard, sacrificing, and enduring financial difficulties for higher education, the loans did more harm than good. Notably, women make up a significant portion of college graduates and bear a substantial portion of the debt. This is made more challenging for women due to the gender pay gap. People of color face similar challenges. From 2008 to 2018, tuition costs continued to rise, but funding and minimum wage remained relatively stagnant, creating a debt trap for many.

Is it better to skip college altogether? Well, Bill Gates and Mark Zuckerberg didn't attend traditional college. It's worth noting that people with bachelor's degrees typically earn about a million dollars more in their lifetime compared to high school graduates. High school grads often face challenges like limited job benefits and difficulty finding secure employment. However, it's becoming more common for employers to relax their college degree requirements. In fact, college enrollment has declined significantly in the last 50 years as more people realize this.

Other countries, like Kenya and Egypt, offer free education to everyone, making you wonder why it's not the same in the U.S. Back in the 60s and 70s, you could pay off your student debt with a summer job. But things changed when the government started caring more about the companies providing the loans than the people borrowing them. This shift has consequences – it makes people delay important life events like I mentioned before. Some even choose to join the military to avoid paying off the debt.

Lets Wrap it Up: (I still have to come up with a costume for tonight)

There you have it, folks, a spine-tingling journey through the dark depths of the student loan abyss. As we bid adieu on this haunting Halloween, remember that while the horrors of student debt are real, so too are the calls for reform and change. It's a chilling tale of shifting priorities, from the altruistic origins of higher education to the current profit-driven reality.

But don't be too spooked; the more we understand these ghoulish intricacies, the better equipped we are to confront the monsters under the bed. The impact of student loans reaches beyond individuals, casting a shadow over society and the economy as a whole.

As we reflect on the words of Alan Collinge, who faced the harrowing truth of student loans firsthand, we must consider the far-reaching consequences of this debt. It's a tale of sacrifices made for the sake of education, with outcomes that often feel more like a cruel and expensive joke.

The road ahead may be treacherous, but with increased awareness and advocacy, we can work towards a brighter future, one where the pursuit of knowledge doesn't come at the cost of a lifetime of debt. So, is it better to skip college altogether? Well, Bill Gates and Mark Zuckerberg didn't take the traditional route, and they've done quite well for themselves. I can’t say for sure or make that decision for anyone else, but myself. I never finished college. I went to Community College for one year and I’m doing pretty fine. 🤷‍♀️(In a career transition state, so this is all prevalent in my life as I look at job requirements)

In the midst of this eerie narrative, let's not forget that student loans are just one chapter in the grand story of higher education. Other countries have figured out how to offer free education to all, and it's time for us to question why the heck we haven't followed suit.

This issue continues to evolve, and organizations like the Student Debt Crisis Center provide real-time updates for those brave enough to stay in the know. So, who's to blame for this labyrinth of horrors – the government, universities, banks, or all of us? In this twisted tale of shifting values, from do-gooder beginnings to a greedy reality, it's clear that the pursuit of money has overshadowed the pursuit of knowledge. Stay vigilant, stay informed, and who knows, perhaps someday, the nightmare of student loans will be vanquished. Happy Halloween! 🎃👻🧙‍♀️

Thanks for reading!

~Madelyn

Source:

Dark History By Bailey Sarian: Is College Even Worth it?: The Dark History of Student Loans