Student debt is still awful. So why are we students still taking out loans?

We can't saddle yet another generation with this mess

By Mary Elizabeth Williams

Senior Writer

Published September 6, 2021 2:00PM (EDT)

A student with a dollar bill attached to his cap during the graduation ceremony. (Brooks Kraft LLC/Corbis via Getty Images)
A student with a dollar bill attached to his cap during the graduation ceremony. (Brooks Kraft LLC/Corbis via Getty Images)

Why on earth is this still happening? Here we are, in throes of a long overdue reckoning about the generation-ravaging scourge of student debt. Here we are, trying to figure a way out of a $1.7 trillion dollar mess that was already kneecapping the financial and professional ambitions, personal lives and mental health status of millions of former students. Here we are, with debt forgiveness a front and center issue for the Biden administration. And yet, here we are, with an entire population of current and prospective students are now going back to school and facing the same crushing, predatory situation.

Despite an ongoing pandemic that has made higher ed a still often virtual experience for many of us, tuition costs are rising. Meanwhile, a recent NerdWallet analysis from the National Center for Education Statistics reports that this year's incoming students are taking out more loans than ever. While I can't personally shake every parent and every member of the class of 2022 by the shoulders here, I will simply plead for you to turn back before it's too late. We aging GenXers and our kids deserve a better future than this.

"Apply online for your undergraduate loan now. It's fast and easy," promises one well-known lender on its site. "Fill out some basic information and find out how much you qualify to borrow in just minutes." Sure, that's just what you do, right? What's the worst that could happen?

As financial advisor Chris Kampitsis noted to Forbes earlier this year, "Short of winning the lottery, there is often no feasible alternative for students with limited means to pay for college." These are your options, learners: Powerball or crippling debt. And for what, exactly? When we have all observed pretty clearly over the past year that you can get the same lecture you'd hear in those ivy-covered halls just fine while sitting in your bedroom on Zoom?

Want a daily wrap-up of all the news and commentary Salon has to offer? Subscribe to our morning newsletter, Crash Course.

"I'll give the unpopular advice," says Corey Noyes, founder of Balanced Capital Investments. "There is very little data to support that college choice has any impact on future income. Going to your dream school because of its prestige is likely a waste of money, at least as future income is concerned." The evidence is indeed contradictory at best. CNBC reports that according to the State of Working America Data Library, "College degree earners make about 49.5% more than someone with only a high school diploma," but, "This figure hasn't grown much in recent years, even though student borrowers (and their families) are taking on 116% more in student loan debt than they were a decade ago." And if you are among roughly the 2 out of 5 college students who will not graduate, you get to be in that vast population of American workers without a degree, but all the student debt of someone who does have one.

So if you're thinking about college now, gaze past freshman convocation and into the future. According to a 2021 Harris Poll of adults aged 33 to 40, 68% of those who took out student loans are still paying them off, and 52% say their loans weren't worth it. Debt, they say, has impacted their ability to buy a home, save for the future and make the geographic and career choices they wanted.

There are plenty of other paths. Particularly now, at this very strange and uncertain moment, it is the responsible thing to do to look into them. This week, a friend's daughter is touring community colleges, inspired by the example of her older cousin, who is studying online in her second year of community college. A neighbors's kid is currently living at home and going to a city college to save money. Another's has decided to take a year off, and at least one of my daughter's classmates is going into the military. They all may end their academic careers in different places, but for now, they're being smart and cautious. They are a select group, for sure, but they and their families are looking at the big picture and deciding they don't want to fall into the same traps their predecessors are still digging out from.

I knew, from the moment I sent my two children off to the nearby public school kindergarten, that this was likely not going to be a story that culminated with either of them at Harvard Law. Yet even tucked in our scruffy educational outpost, the drumbeats were deafening. Were we paying for SAT tutoring? Were the kids doing "enriching" activities that stood out on applications?

"You'll know the right school when you visit it," a college counselor told us when my firstborn was getting ready to graduate back in 2018. "She'll walk on to the campus and fall in love." The kind of love that $70,000 a year in tuition can get you.

My daughter applied to some big name, fancy schools and some less exciting but affordable ones. In the end, the financial aid offered from the fancy schools was mostly in the form of an "award" of a little money and a suggestion that a jobless, barely-18-year-old and her barely-middle class parents take out near unlimited loans, annually. She cried the day we told her we couldn't make it work with any of the fall-in-love schools — that we, in fact, wouldn't. She cried a long time.

Now, she's in her final year at a humble, small-town state school she loves; and if all goes well, she will graduate this spring will zero debt. We have used the little savings we began socking away when she was an infant, worked whatever financial aid we could get, gone without a lot of home repairs. She has held down jobs, she has transferred the community college credits she diligently earned in high school. It's been challenging. Has my daughter experienced the idyllic university experience of every romanticized tour she ever went on? Probably not. Has she made friends, learned things, gained work experience, and will now one day be a 35 year-old woman unbeholden to a student loan officer? That's the dream. And as my younger daughter now begins her senior year of high school, that's the dream for her as well.

How do we shake free of the toxic notion that loans are inevitable? It starts by flipping the script.

"When I was in high school, they drilled us with this whole idea that the first thing you do is focus on where you want to go to school, find the best colleges, and then figure out how to pay for it later," says Corey Noyes. "You're doomed from the beginning if that's your mindset. That's why we are where we are right now. I think you need to pick a budget first, and figure out what fits into there."

I am not entirely against loans for certain individuals and certain circumstances. (I didn't exactly buy my co-op with cash.) Depending on a student's academic potential and the field of the student's study, loans right now may well be a smart investment toward future earning potential. But it's essential to be clear-eyed, practical and realistic. It's wise to remember that college is not the best or the direct path for everyone anyway.

Jack Craig, a certified personal trainer with Inside Bodybuilding, offers an example. "Personal training requires a few certifications," he says, "most of which can be done online or through some certification programs. There are actually many high school-based programs that can teach students how to become personal trainers."

Bankruptcy attorney Lyle D. Solomon concurs. "Higher ed is evolving. More and more employers are willing to overlook the piece of paper if you still have experience and training. A lot of tech jobs do not care about the degree. They care if you can code, for example. If you can pull together some decent certifications, and show competency in the skills needed for the job, then a degree is overlooked. Graphic designers, video editors, website designers, sales, all don't need degrees, they need competence."

And with work experience and/or career readiness programs, a person can always decide to go to college later for a more advanced path in their field. There is nothing wrong with job training, especially compared with discovering that you hate your major after three years of paying university tuition.

And there are other considerations before signing on for loans. It is worth it to really scour for scholarships and financial aid, and then remember to negotiate.

"Do not accept an offer of admission to a school without first asking for additional merit scholarship money," says Rachel Coleman of College Essay Editor. "It's entirely possible that the answer is no, and that's fine, but you lose your leverage if you accept the offer of admission without first asking for more money."

I accidentally discovered this firsthand last year when I turned down the academic program I'd applied to, because of the costs. They opened up a conversation, and wound up giving me more scholarship money to make it happen.

None of this is easy. It is hard telling our kids we can't afford things they may want, things it seems all their friends are getting. It is hard hustling for financial aid. It is hard taking a lengthier path to a degree, and working while studying. It is hard living at home instead of going away. And it is effortless — so terrifyingly effortless — to sign a form and get what feels like free money. It is effortless to assume that the money will magically be there later.

I recall the friend who, a few years back, had two kids in the same wildly exorbitant out-of-state university at the same time, both on loans. "The number doesn't even seem real," she'd said then. One of them is now on the path to a lucrative career. The other dropped out, and with no degree, is struggling to pay off those loans. You think you know your children? You think you know your own future? You want to take that gamble?

It is obscene that getting an education is so incredibly, stupidly difficult if you are not rich (or reckless). It is obscene that the system is so corrupt and broken in so many places. I can't make it fair. All I can do is remind you that you are not helpless regarding choices that will directly affect the next few decades of your life. And that after everything that's already happened from the awful cautionary tale of American higher education, we still have so, so much yet to learn.

By Mary Elizabeth Williams

Mary Elizabeth Williams is a senior writer for Salon and author of "A Series of Catastrophes & Miracles."

MORE FROM Mary Elizabeth Williams

Related Topics ------------------------------------------

Commentary Higher Education Student Debt Student Loans