The Real Problem Behind America’s $1.7 Trillion Student Debt Crisis

Student loan forgiveness has been in the news as Congress and the Biden administration discuss potential moves to ease the burden of student debt.

Many progressives are in favor of large student loan cancellation policies. But there are questions about whether that will actually solve anything long-term. The student loan cancellation/forgiveness debate is complex. And the problem is real. There’s an estimated $1.7 trillion in student debt, which constitutes a crisis.

Of course, it’s easy to propose forgiving debt as a simple fix. But there is a deeper problem that loan forgiveness just can’t fix. In fact, some argue that we will return to crisis levels of debt even if the current debt is canceled.

So what’s the real problem here? 

Luxury Prices

One of the biggest problems with the current traditional higher education system, which largely contributes to the debt crisis, is that we’re paying luxury prices for non-luxury items. The average cost of college attendance for in-state public college students is around $26,000/year.

College attendance has become a high-demand item with a luxury price. This leads to many people taking out large loans for the chance to attend.

But despite the price, college is not a luxury item. It offers comparable value to free online courses, cheaper community college classes, real-life work experience, and old-fashioned books.

The majority of college students will read textbooks, listen to lectures, write papers, and take tests. The latter rarely happens in real life. The other three can all be done for much cheaper, if not for free. 

College is not a luxury item. It may have been in the age before the internet when learning and education were less “accessible”. But now with an entire world of information at our fingertips, college attendance has lost its exclusive, luxury status.

Attending College Isn’t Enough

Back in the day when a college education was still a symbol of status and privilege, it was worth quite a bit. It opened doors that would otherwise have remained closed. But now, with even most entry-level jobs requiring a degree, it is no longer a luxury item that carries the same weight. 

The democratization of entrepreneurship has given people opportunities to build something of their own, without going to college. It’s become evident that having a successful career has less to do with a degree and more to do with creative thinking, the ability to persevere, responsible time management, and personal networking. That is what makes people stand out in a stack of applications now.

A college education is an “assumed answer” in our culture. We assume we need to go to college so we do, whatever the cost. But let’s face it: the value of a college education doesn’t match up with the prices we’re paying for it. 

Real Education

We need to understand that a college education isn’t worth as much as it was in the Renaissance or even fifty years ago when it was an exclusive item. It’s become more common, and therefore, less valuable. It’s like paying designer prices for the same pair of socks that everyone else has.

What students need now is a real education. Not a theoretical one. Students don’t need to study case studies, they need to live them. A real education prepares students for real life, with its bills, schedules, tragedies, and responsibilities. Real education teaches students how to think creatively, solve real problems, build real relationships, and manage real projects.

Information is available to everyone. Some careers still require specialized education. But most jobs can be learned on the go or through real-life training. Forgiving student loans won’t change the crisis we’re in unless we reassess the value of college and stop paying thousands of dollars for something that doesn’t deliver the same results it used to.

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