ISACOLLEGEEDUCATIONWORTHTHEDEBT?

StudentDebtCrisis:HowCanCollegeStudentsAvoidBeingInDebt?
SamariaGarcia
e3CivicHigh

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

Abstract
Thebasisofthisresearchwastoexaminetheissueofthestudentdebtcrisisamongcollege
studentsintheUnitedStates.Inthelast50years,financialaidfocuschangedfromgrantsto
loans,increasingtheamountofdebtagraduatingcollegestudentowed.Itisimportantfor
studentstodotheirresearchandgetgoodgradesinhighschoolbecauseitwilldefinewhothey
willbecomeinthefuture,whatcollegetheyareeligibletoattend,howmuchdebttheywill
incur,andlearnwaystobeabletoaffordthecollegeoftheirchoice.Ifyourealittletolateof
howcrucialresearchisbeforeyoustartincuringamassivedebt,therearestillwaystoyoucan
manageandbudgetyourfinancialstate,schoolandyourpersonallife.Therearepeoplewho
arguethatgoingcollegeisawasteoftimeduetojobsnotbeingguaranteedduringorafter
college.However,thegoodnewsisthattherearewaysyoucanstillqualifyforfinancialaidand
othermonitarysupportthatcanhelpbothyouandyourfamily,makingitlessstresssful
throughoutyourcollegecareer.Collegewithoutamassivedebtisanoptionanyonecantakewith
theproperpreparationandbudgetingtools.

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

Isacollegeeducationworththedebt?

Inrecentconversationsoftheincrementofthestudentloandebt,acontroversialissuehas
beenwhetheracollegedegreeisworthgetting.Ontheonehand,somearguethatearninga
collegedegreeisamajorlifeachievementthatsomeconsidertobepartoftheAmericandream.
Fromthisperspective,wecanseethatacollegedegreeopensupmoreopportunitiesand
possibilitiesofemploymentwithahigherpayandposition.Ontheotherhand,however,others
arguethatmanypeoplesucceedwithoutcollegedegrees.AccordingtotheBureauofLabor
Statistics,ofthe30projectedfastestgrowingjobsbetween2010and2020,fivedonotrequirea
highschooldiploma,ninerequireahighschooldiploma,fourrequireanassociatesdegree,six
requireabachelorsdegree,andsixrequiregraduatedegrees(IsaCollegeEducationWorth
It?,2015).Insum,theissueiswhetheracollegeorcareerpathisworththedebtornot.
Ithasbecomecommontodaytodismisstheimportanceoffinancialliteracy.Manyhigh
schoolstudents,includingsoontobehighschoolgraduates,underestimatehowcrucialitistobe
educatedandinformedonthissubjectmatter.Unfortunately,teenagerstodaydonttakewhat
teachers,counselors,andparentssayseriouslyinregardstotheireducation.Notknowingthat
thiswilldefinetheirplacementincollege,therefore,affectingtheirfuture.YourGradePoint
Average(GPA)willreflecthowwellyouperformedacademicallythroughouthighschool.The
higheryourGPA,thebetterchanceyouhavetoreceivescholarshipsandgovernmentfunding
thatwillhelppayyourtuitionanddecreaseyourdebtinthefuture.Thatiswhywemustteachon
howmakinganeffortandworkingonyourgradesisveryimportant.Thiswilldefinewhoyou
becomeinthefuture,whatcollegeyouareeligibletoattend,howmuchdebtyouwillincur,and
learnwaystobeabletoaffordthecollegeofyourchoice.

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

WiththefederalstudentloanbalancesintheU.S.exceeding$1.2trillionquadrupling
overthelast12yearstheresearchshowsthattheupsurgeinthenumberofborrowersisdueto
attendingforprofitschoolsinthelastdecadeorso(Berman,2016).Backin2000,only1ofthe
topschoolswhosestudentsowedthemostfederaldebtwasaforprofitschool,whereasin2014,
13were(Looney&Yannelis,2015).Alotofstudentsbelievethatgettingadegreealotfasteris
betterevenifthetuitionisalotmoreexpensive.However,inthelongrunitwillonlyleavea
massivedebtandunfortunatelyajobisntalwaysguaranteedforagraduatestudent.Thisiswhy
doingyourhomeworkandresearchingwhattypeofcollegesareouttherearethebestfitforyour
plansandincome.
Historically,PellGrantswereintroducedin1972andincreasedthenumberofstudents
forwhomhighereducationwaspossible.By1978,thefinancialaidfocuschangedfromgrantsto
loan,increasingtheamountofdebtagraduatingcollegestudentowned.Inthe19751976
schoolyear75%ofstudentsreceivedgrants,21%receivedloanscomparedtothe19841985
schoolyearinwhich29%ofstudentsreceivedgrantsand66%receivedloans(Guiterrez,2013).
The1980salsobroughtadramaticincreaseinthecostofcollege,whichwasrisingfasterthan
inflationandtheaveragefamilyincome.The1990sand2000ssawariseinenrollmentand
tuitioncosts,andasteadilyloweremploymentrateforcollegegraduates.Collegeenrollment
increased11%between1990and2000andincreased37%from2000to2010to21million
students.Theaveragecollegetuitioninthe19901991schoolyearwas$10,620androseto
$13,393in20002001.Betweenthe20002001schoolyearandthe20102011schoolyear,
publiccollegecosts(tuition,room,andboard)increased42%to$18,133.

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

Althoughthecrisisofthestudentloandebtmayseemofsmallconcerntoonlyasmall
groupofstudents,itshouldinfactconcernanyonewhoisattendingorplanningtoattendany
typeofcollegeforthematter.Statistically,about40millionAmericansholdloansandabout
70%ofbachelorsdegreerecipientsgraduatewithdebt(Berman,2016).Tuitionhasrisen
quickerthanincome,makingitdifficultfortheaverageAmericantopayforcollegewithout
incurringdebt.Debtoftenforcescollegestudentsandgraduatestolivewiththeirparentsor
roommates,delaymarriage,financialindependenceandotheradultmilestones.Thisiswhywe
musttakethisseriouslyandintoconsiderationsinceitaffectsourfutureitaffectsourwellbeing
aswellasotheraspectsinourlifelikeourmaritalstatus.Wemaynotwanttoworryuntilthe
timecomesaftergraduating(ifwegraduate)toaddressanyconcernsordebtwemayhavebut
loandebtisamajorcrisiswehavetoday.Studentsshouldcareandbeawareoftheissuemany
Americansfacetoday,duetothemanyreasonsthatledthemintobeinginmajordebtinwhich
theyarestillpayingtodayalongwithotherobligations.Itisaverystressfulsubjectthat
overwhelmsstudents,dropouts,seniorsgraduating,andalumnusbecausetheissuewasnt
addressedontimeandtheamountcontinuestoincrease.

Solutions

Differenttypesoffinancialprograms
Fortunatelyamongallthischaostherearemanywaystosupportyourselfwhileattending
college.Whilenoteverybodygrowsupunderthesamecircumstances,sometimesparentswho
havefinancialstabilitycontributewithasavingsfundtopayoffforcollege.Anotherwaytopay
forcollegeistoapplyforfinancialaid.Financialaidisaprogramfromthefederalgovernment

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

thathelpsstudentspayforeducationexpensesataneligiblecollegeorcareerschool.Ithelpspay
tuition,fees,roomandboard(ifnecessary),books,supplies,andtransportation.
Grantsandscholarshipsalsoprovidestudentswithmoneyforcollegethatdoesntneedto
berepaid.Ascholarshipisafinancialawardgiventoastudentonthebasisofacademic
achievement.Manyscholarshipsarebasedonmerit,however,somealsotakeintoaccount
financialneed.Ifyoumaintainagoodgradepointaveragethroughouthighschool,thebetter
opportunitiesyouhavetoreceivescholarships.AFederalPellGrantisusuallyawardedonlyto
undergraduatestudentswhohavenotearnedabachelorsoraprofessionaldegree(FederalPell
Grants,n.d.).Youcanreceiveagrantfornomorethan12semestersorequivalenttosixyears.
Theamountofmoneyastudentcanreceivechangesyearly.Forthe201617awardyear,the
maximumawardis$5,815.Theamountyouget,though,willdependonyourfinancialneed,
yourcostofattendance,yourstatusasafulltimeorparttimestudent,andyourplanstoattend
schoolforafullacademicyearorless.
Unlikegrantsorscholarships,aloanismoneyyouborrowandmustpaybackwith
interest(Loans,n.d.).Thereareseveraltypesofloansthateithercomefromthefederal
governmentorfromabankoraprivatesource.Theamountoftheloanyoumayreceivedepends
onyourstudentstatus.Ifyouareaparentofadependentundergraduatestudent,youcanrequest
aPLUSloan(ParentLoanforUndergraduateStudents)tohelppayoffyourchildscollege
expenses.Ifyouareanundergraduatestudent,youcaneitherreceiveupto$5,500peryearin
PerkinsLoansdependingonyourfinancialneedor$5,500to$12,500peryearinDirect
SubsidizedLoansandDirectUnsubsidizedLoansdependingoncertainfactors,includingyour
yearincollege(ibid).Ifyouareagraduatestudent,youcanreceiveeitherupto$8,000eachyear

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

inPerkinsLoansdependingontheavailabilityoffundsatyourcollegeorcareerschoolorupto
$20,500eachyearinDirectUnsubsidizedLoans.Remember,youcanborrowlessthanyour
schooloffersyou.Youshouldonlyborrowwhatyouneed.
Ontopofallthegreatbenefitsthatfinancialaidprovidesastudentwithtosupportthem
duringcollege,italsooffersworkstudy.Workstudyisaprogramwheretheyhelpyoufindajob
basedonyourfinancialneed(WhatisWorkStudy,n.d.).Ifastudentisstrugglingtofindajob
ontheirown,thisprogramassiststhemprovidingoneforthem.Havingeitheraparttimeor
fulltimejobhelpsyousupportyourselfduringandaftercollege.Youdonthavetoworryabout
loansuntilyougraduatebutyoucanstarttosaveuplittlebylittletomakeiteasieronyourselfin
thefuture.

Strategiestomaintainfinancialstabilitybybudgeting
Today,ithasbeenacommonpracticeformanystudentstowastetheirownmoneyand
thegovernmentsfinancialaidtheyreceive.Insteadofsettingsomemoneyasidefornecessary
expenses,theyspenditonnonessentialthings.Considerthemath:$5adayatStarbucksis
$1,825,dinneroutat$30aweekis$1,560,saysReneeHanson,privatewealthadvisorwith
AmeripriseFinancial(Driscoll,2012).Thatisatotalof$3,385,whichcouldbeenoughforthe
averagecostofoneyearofcommunitycollege.Althoughmanymayfinditoverwhelming
whenitcomestobudgetingtheirownmoney,itispossible.
Bydoingresearch,youcanfindawaytostrategizeyourbudgettomakeiteasieron
yourselfandyourfamily.Ifyourfamilyiscontributingbypayingapartialamountorallofyour
collegeexpenses,makesuretocreatealistofyourfamilysincomeandexpensesaswellas
yours.Thisway,youcangetanideaonhowtoorganizeyourbudgettobestfityouandyour

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

familysneeds.Onceyougettheideaofyourbudget,youcansetatimeframeonhowandwhen
topayforthem.Inyourbudget,makesuretoincludeallofyourexpensesandincome.For
collegestudents,thistypicallyincludesfinancialaid(grants,scholarships,studentloans,and
workstudy),incomefromaparttimejob,contributionsfromparentssavings,tuition,fees,
books,supplies,meals,clothing,transportation,healthinsuranceandpersonalexpenses.
Duringthecourseofyourcollegecareer,alotofunexpectedthingsmayhappenthatcan
beaminorsetbackifyourenotpreparedfinancially.Havingabudgetandcreatingan
emergencyfundcanmakeiteasieronyoutocoverforthoseexpensesandmakeitlessstressful
onyourself.Forexample,ifyourcarbreaksdownoryouhaveanunexpectedmedicalexpense,
youllbecoveredwiththemoneyyousaved.Ifyourbudgetdoesntbalance,althoughitmaybe
stressful,youllbepreparedandhavetimeonhowtoreduceyourexpensestomeetyourgoal.
Thisiswhyitsimportanttototalyourincome,makealistofyourexpenses,andmakesureyour
budgetbalancestomaintainfinancialstability.

Waysondealingwithdebtandpayingitoff
Theroadtopayingofffinancialdebtcanbelongbut,withtherightplan,itdoesnthave
tobe(9WaystoPayOffStudentDebt,n.d.).Ifyoucontinuewiththesamestrategyyouhad
incollege,onceyougraduateandhavetostarttopayoffloans,thiswillhelpyouinthelongrun.
Oncearealisticbudgetisestablished,itsmucheasiertoseewhereyourmoneyisbeingspent
andstayontrackwithyourbudget.Whenthetimecomestostartpayingoffyourstudentloan
debt,itisrecommendedtostartpayingmorethantheminimumbalancetoavoidhighinterest
ratesandtopayoffyourdebtalotquicker.Ifyouhappentohaveextramoneyduetoyourjobor
forwhateverreason,insteadofsplurgingonsomethingunnecessaryorthingsyoudontneed,

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

savethatmoneythatcanbeusedforotherexpenses.Oncecollegeisoverandyourefocusedon
yourjob,ifyouhappentohavemoretime,makingyourselfcoffeeinsteadofspending$5daily,
itcanmakeasmalldifference.Ifyoucanmakeyourownfoodinsteadoforderingcarryoutor
diningout,itcanalsobeanotherchangeyoucanmakethatwillhelpyoudrasticallyinbudgeting
yourmoneyandhavingcontrolofyourfunds.Youcandecidewhatitisyouneedtosurvive,and
stillbeabletoliveacomfortablelifeuntilyourdebtispaidoff.Ultimately,theselittlechanges
canmakehugedifferencesinpayingoffyourdebtfaster.

Limitations

Thelackofeducatingfinancialliteracyinschools
Throughoutourschoolcareer,wearetaughtthatcollegeissomethingnecessarytoattend
(BewaretheTop5ReasonsforDroppingOutofCollege,n.d.).Havingadegreeisoneofthe
biggestaccomplishmentsonecanhave.Unfortunately,wearenottaughtonhowcrucialitisto
workhardinhighschooltoobtainfreemoney,likescholarships,topayforourcollege
education.Alotofschoolsdonotfocusoneducatingtheirstudentsonthenegativesideof
college,suchas,thecostofit,thedifferentoptionstheymayhaveforfinancialaid,orhow
studentscanbudgettomakeitincollegeandnothavetodropoutbecausetheycouldntaffordto
gotoschoolanymore.Studentsarepoorlypreparedandrealizetoolatethattheylackthefunds
tocovercollegecosts(ibid).Theyalsounderestimatetheimportanceonhavingasitdownwith
theircounselorortheirparent(s)todiscusstheprosandconsbeforeenrollinganddecidingif
takingayearoffisabetterfinancialdecision(Denhart,2013).

Academicgoalsvs.personalpriorities

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

Nowadays,alotofjobsdontrequirecollegedegreesbutyoucanstillliveacomfortable
life(ibid).Somejobsevenofferprofessionalopportunitiestotheiremployeeswithoutrequiring
adegree.Manystudentsfacethedifficultdecisionofchoosingbetweentheiracademicgoals
whentheirpersonallifedetersthem.Theyhavetodecideifgoingbacktoschoolisworthitorif
workingafulltimejobwithagoodpayisabetteroption.Sometimesoutsideobligationsarea
majorproblemtoobigtoignore.Thisiswhymanydontattendorevengraduatecollegebecause
theirprioritieschangeandschoolisnotanoptionanymore.Theyhavetoprovideforthemselves,
theirfamily,andtakecareofbills.Theyratherbemakingmoneythanpursuingacostlydegree.
Evenwithalloftheseresponsibilitiesandobstaclestheystillmanagetohaveasustainablegood
life.
Recommendation

Whileitistruethatattendingcollegecanleadtoamassivedebt,itshouldntdiscourage
studentseitherapplyingorplanningtogotocollege.Fortunately,therearemanywaysinwhich
astudentcanaffordtogotocollegewithoutincurringalargeamountofdebt.Theseoptions
includefinancialaid,grants,loans,workstudy,scholarships,partorfulltimejobs.AlthoughI
grantthatgettingacollegedegreeisveryimportant,Istillstandthatdoingyourresearchand
educatingyourselfonwaystopayforcollegeisthebestwaytoavoidsubstantialdebtor
droppingoutofcollegeduetolackoffunding.Waystoavoidthestudentloancrisiswearein
todayisbyeducatinghighschoolstudentsandtheirparentsonwaystopayforcollegefromthe
beginning.Encouragingstudentstoperformtheirbestacademicallycanqualifythemfor
scholarshipsandexpandtheircollegeoptions.Wecanalsoinformparentsandstudentsonhow

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

10

tobudgettheirexpensesandincome.Onceitisestablishedandkepttrackof,itllbeeasierfor
bothparties.
Whilesomemightviewnotgoingtocollegeasthewrongdirectiontofollow,the
researchsuggeststhatmanycanfindasuccessfuljobwithouttheneedofadegree.Sometimes
lifegetsinthewayandstudentsmustmakeadifficultchoicethatdoesntinvolvetheir
education.Whileitistruethatsomewhodontgotocollegemaynothavethebestjob,thereare
peoplethatdohaveagoodpayingjoborevenhaveasuccessfulcareerwithoutadegree.A
benefitthatnoncollegerecipientshaveovercollegestudentsisthattheydonthaveanystudent
debtincurred.Tosummarize,ifyouchoosetoattendcollege,makesureyouandyourparent(s)
informyourselvesoftheprosandconsofcollege,thatwayyourepreparedinyourresearch,
organizedinyourbudget,andhaveanideaonhowandwhenyouwillpayoffyourdebt.

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

11

References

ArticlesAdvice.(n.d.).
BewaretheTop5ReasonsforDroppingOutofCollege
.Retrieved
March22,2016,fromhttp://www.collegeview.com
Berman,J.(2016,January16).
Americasgrowingstudentloandebtcrisis.
RetrievedMarch22,
2016fromhttp://www.marketwatch.com
CollegeEducationProcon.org.(2015,January13).
IsaCollegeEducationWorthIt?
.Retrieved
March22,2016,fromhttp://collegeeducation.procon.org/
Denhart,C.(2013,August7).
HowThe$1.2TrillionCollegeDebtCrisisIsCripplingStudents,
ParentsAndTheEconomy
.RetrievedMarch22,2016,from
http://www.forbes.com
Driscoll,E.(2012,October1).
SixCollegeBustersEveryStudentShouldAvoid
.RetrievedMarch
22,2016fromhttp://www.foxbuisness.com
Fastweb.(n.d.).
9WaystoPayOffStudentDebt
.RetrievedMarch22,2016,from
www.fastweb.com
FederalStudentAid.(n.d.).
FederalPellGrants
.RetrievedMarch22,2016,from
https://studentaid.ed.gov
FederalStudentAid.(n.d.).
Loans
.RetrievedMarch22,2016,from
http://studentaid.ed.gov
FederalStudentAid.(n.d.).
StudentEmployment:WhatisWorkStudy?
.RetrievedMarch22,
2016,fromhttps://www.cwu.edu
Guiterrez,C.TheImpactofStudentDebt(AwardWinningShortFilm).
Youtube
.

ISACOLLEGEEDUCATIONWORTHTHEDEBT?

12

AmberBlueFilms,21Jan.2013.RetrievedMarch22,2016from
http://www.youtube.com
Looney,A.,&Yannelis,C.(2015).Acrisisinstudentloans?Howchangeinthecharactersistics
ofborrowsandintheinstitutionstheyattendedcontributedtorisingloandefaults.
BrookingsPapersOnEconomicActivity
(pp.624).Washington:BrookingInstution.