A guest essay dives deep into the numbers, and finds some troubling inequalities.
 | By Taylor Maggiacomo Graphics Editor, Opinion |
After the rush of receiving my college acceptances, I sat down with my parents and decided on the school that felt most right to me. It was also the most expensive — by a lot. My parents were very supportive of my choice but explained that they were comfortable financially but not that comfortable. If I was going to attend that school, I would have to take out student loans. |
So I did, joining the millions of other students that took out large, unthinkable loans in the hope that one day, we'd have big shiny careers with big shiny salaries and that college would have "paid off." Years later, I realized it wasn't that simple. Even as I made my income-based payment every month, the balance increased bit by bit. My friends and I worried that the debt beast would never shrink, even with raises and promotions. |
Then, the repayment pause from the pandemic offered a reprieve. For three years, many of us have been able to chip away at the beast. |
The repayment pause will end this fall, and the Supreme Court has now ruled against President Biden's student loan forgiveness plan. In a guest essay, Laura Beamer and Marshall Steinbaum from the Jain Family Institute point out that, for all the debate over debt relief, America's student loans were never going to be repaid anyway. With rising tuition, interest, and debt-to-income ratios, student loan repayment was dwindling even before the pause, and that will surely worsen when monthly bills start arriving again. |
What fascinated me was just how recent of a crisis this is. According to the data the Jain Family Institute has collected for student loan balances over time, it was only in 2013 that about half of all student loans — 50.6 percent to be exact — started to carry higher balances than the original borrowed amount. The number jumped further to over 60 percent in 2019. The pandemic repayment pause offered dramatic relief to the cohort of recent borrowers, lowering their rate of loans exceeding original balances to below 5 percent. |
What also stood out to me was the gendered divide between those who can repay their student loans and those who can't. Before the repayment pause, men were typically able to decrease their balance to 70 percent of the original amount over 13 years, while women maintained a balance of around 110 percent of the borrowed amount over the same time frame. There's a similar racial gap: White and Asian borrowers typically make more progress than Black and Latino borrowers. |
There's no doubt that there is a student loan crisis here in America. In the guest essay, Laura and Marshall outline how we got into this mess and how we can move forward. |
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