Student Loan Crisis

Federal Student Loan Crisis

Introduction

The student loan crisis in America has recently reached its peak with 1.3 trillion dollars in outstanding student loan debt (Barrett & Dickler). Tuition is not only growing at a rate faster than inflation but more students are also pursuing a postsecondary education (Houle). These students include individuals from all income levels, so those unable to afford tuition are forced to take out student loans to make up the difference. This problem directly impacts the 40 million Americans who have taken out these loans; however, more people are affected than just those in debt (Franken). Student loan debt influences major life decisions such as starting a family, buying a house, and retiring. Beyond the individual problems debt creates, this crisis is impacting the economy, politics, and the nation as a whole; therefore, if the student loan debt crisis is not rectified, the well-being of America will be negatively affected.

Historical Influence

In 1965, American president Lyndon B. Johnson introduced the Higher Education Act. For the first time, this enabled the average student to obtain financial aid, scholarships, and low interest loans through the federal

For example, African Americans have approximately 51% more debt than Caucasians (Houle). Many of these students fall under the low income category and consequently are more likely to need student loans to pay for tuition. Although they would qualify for more financial aid than Caucasians, numerous of them are unaware of the process. Latinos, on the other hand, typically borrow less money to finance postsecondary education (Huelsman). Due to an adverse attitude towards loans, they try to pay for college themselves by working multiple jobs and attending less expensive schools. Specific individuals have a higher chance of accumulating more student loan debt due to their cultural