Student Movements Today: Facing Student Debt

One of the largest problems students face today is the issue of student debt. College costs more than it ever has before and students are graduating from places of higher education with thousands of dollars owed in student loans. Not only is this an astronomical amount of money owed by our student population but the job market is daunting for many. Without employment many find themselves asking the question “how am I ever going to pay this back?” The increasing student debt has become baggage that many young people feel weighed down by.

The total amount of debt owed by students has hit the $1.2 trillion mark, bringing it to the second highest form of consumer debt behind mortgages. This is extremely troubling and worrisome to many students, educators and economists. The total debt is climbing and so are the interest rates. This year the rate on subsidized loans was around four percent and recent legislation has put a ten year cap at 8.5 for undergraduate, 9.5 for graduate students and 10.5 for parents! Certain politicians, such as the Tea Party conservatives, want to set interest rates in a way that will generate revenue to cover the national deficit.

A shocking reality is that certain private corporations have had growing profit margins because of student debt. Companies like Sallie Mae have benefited from the increasing debt because they can borrow at incredibly low rates from Federal Home Loan banks. Sallie Mae now owns approximately 15 percent of the national student debt ($162.5 billion). This allowed Sallie Mae to make $2.5 billion in interest payments from student loans last year. These large corporations are making profits while the students are suffering. The negative effects that many students will face by not being able to pay back their loans will be faced for years. The repercussions of defaulting on a loan are not just felt immediately but years down the road as well.

Corporations like Sallie Mae are not the only ones reaping a profit. The education department itself has been making enormous profits in the last few years. In the fiscal year of 2013 they made $42.5 billion in profit from federal student loans. This profit margin is actually higher than the total amount of Pell Grants and student aid offered for low-income families. Many students are asking why the government and the educational system in the US do not use more of that profit to give aid to students in need rather than try and pay off deficit. Politicians are trying to fix national problems at the cost of our nation’s students. The increased amount of debt that so many are facing means that less and less students are able to make large investments or purchases, of things like homes, upon graduation. There is a growing number of graduates who are stuck at home because they can not afford to be financially independent.

If you are one of the 37 million students who is in debt or if you are going to graduate from college or university in the next few years this issue is deeply important to you. The most important thing is not to be afraid to speak up. If students remain silent our financial treatment will remain stagnant. There are many examples of students participating in successful protests dating all the way back to the 1930’s. Many protests have been organized already and there is a massive online movement of students and other citizens organizing against this mistreatment of students. If you are interested in signing petitions against the increasing student debt get connected with the studentdebtcrisis.org. When enough voices are raised in unison the government will have no choice but to listen and change its policies. There have been successful protests already including this one in Delaware outside Sallie Mae headquarters which took place back in May of this year when many students were graduating and finding themselves in a large amount of debt. If you are one of the millions of people affected by student debt do not remain silent, this issue is one that will only get worse for future students if it remains unchecked. Our country faces a huge financial crisis in the near future if something is not done to change the way we approach student debt.Graham Greenland