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A simple solution to the student loan crisis: borrow less (essay)

A Simple Solution on Student Loans
July 6, 2012

Every article I’ve read on the student loan debate seems to be missing one very crucial, simple way to completely eliminate student loan debt.  It’s so painfully obvious that it flabbergasts me that no one, I mean no one, has pointed this out. 

Many ideas are put forward. Lower tuition. Let students discharge their student loans in bankruptcy.  Offer more Pell Grants, don't cut them. Limit the amount of aid that goes to for-profit colleges. Push for more disclosure of student loans and the cost of college.

None of those are the best solution to this problem. The real answer is simple and unpopular. It lies not with Congress, or the president, or the colleges and universities, but with the students. Students have to stop borrowing money to pay for college.

I know what you are thinking: “What, they can’t do that!”  “How do you expect them to pay for school!” “That’s impossible!”  “Colleges are too expensive!”  I know there is a lot of emotional reaction to this statement, mainly because it flies in the face of popular wisdom, which is, “Borrow money now, focus on school, pay the money back after you finish school, when you may, or may not, be earning a higher salary.”  We are borrowing on anticipated future earnings, or “leveraging,” as it might be called. 

But I think we’ve forgotten a basic rule of economics: If you can’t pay for it, don’t buy it. Go to a school that you can afford.

Students have options. They can go to community college at a relatively low cost for two years, then go to a four-year school after that.  They can work full-time and take online courses at cheap universities that are making education affordable and that will not accept federal financial aid, not because they are not accredited, but because they want you to graduate debt-free, at schools like New Charter University, or even tuition-free universities like University of the People.  It’s not Plan A, per se, but it is doable.  It’s not the freshman college experience, but it is a path to graduating debt-free.

Isn’t this how education is supposed to be? Work gives you the practical, real-world experience, and adding the educational understanding helps create a holistic learning approach.  Three-quarters of college students juggle families, jobs and school.

The debate is not, should lower or increase interest rates?  The “debate” should be about students taking a tough stand, for themselves, for their future, for the next generation’s future -- saying no to student loan debt.

Don’t get me wrong.  Colleges and universities across America need to do everything possible to lower the cost of tuition. Absolutely.  But do college students need to choose schools that are more affordable for them? Absolutely.

I know this is unpopular, but so have been many things in history that go against the grain.  Thomas Paine, one of our nation’s founding fathers, stated, “Perhaps the sentiments contained … are not yet sufficiently fashionable to procure them general favor; a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, and raises at first, a formidable outcry in defense of custom.  But the tumult soon subsides.  Time makes more converts than reason.”

Bio

Aaron Broadus is a financial literacy counselor at the University of Missouri-Kansas City School of Medicine.

 

 

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