Diana Olmedo

WRTG 2010
Dr. Richards
April 18, 2016
The Negative Effects of Rising Student Debt
Student debt has become possibly the largest issue with higher education today. Recently,
the media has begun to talk about rising tuition and student debt due to the presidential race and
the publicity that Senator Bernie Sanders has been giving to the issue. However, there is still
nothing being done to stop the rise of student debt. College graduates are starting in a job market
that is very competitive and many do not find jobs within the first year of their graduation.
According to the Institute of Education Sciences (IES), only 66.3 percent of college graduates
were employed within two years after their graduation. Now, one may say that 66.3 percent is a
very high number. However, students go to college to earn a degree so they can have a job in
their respective field once they have graduated. The degree is earned because with the degree
comes the promise of a better tomorrow. In a way, it is almost like a guarantee to a job. Maybe if
students had not spend thousands of dollars on tuition this would not be a huge issue. However
that is not the case and the issue is that is that college students do not start from zero.
Mark Kantrowitz wrote in the Wall Street Journal that the 2014 college graduates have an
average of 33,000 dollars in student loans to pay off. The obvious question here is if there is such
a high unemployment rate and student debt at its highest peak, is higher education really worth
the price? It is a question that does not have an answer, however, it should be addressed as soon
as possible because student debt affects the nation, households, and individuals themselves.
Although many authors have taken the time to address what has caused the rise in student
debtthe issue and offer possible solutions, they have not been acknowledged because there has

been no change. Most of the authors who are discussing the issue of rising student debt are
involved in higher education, or once were. Most of the authors focus more on the institutions
themselves which occasionally mentioning the students and faculty.
Some of theA few authors discussing student debt are Christopher Avery and Sarah
Turner in "Student Loans: Do College Students Borrow Too MuchOr Not Enough?" (2012),
Pamela Burdman in "The student debt dilemma: Debt aversion as a barrier to college access
(2005), Jeffrey J. Williams in Student Debt and the Spirit of Indenture (2008), Matthew Reed
and Debbie Cochrane in "Student Debt and the Class of 2011" (2012), Thomas Muller in
Changes to the Student Loan Experience: Psychological Predictors and Outcomes (2014), and
Meta Brown, et al., in Student Loans and the Dynamics of Debt (2014). These authors have
discussed the issue that has continued to grow throughout the years and they have offered
possible solutions. They all have come to the conclusion that if student debt is not is addressed
the worth of higher education will decrease.
Since student debt has become an issue of such a large magnitude, it is now affecting the
nation. Pamela Burdman claims that because student debt has increased so much in the last
decade, it is only a matter of time before college grads, who are barely entering the work force,
will start to file for bankruptcy because there are no jobs available for them. She claims this will
affect the nations economy very negatively and it could possibly send the nation into a great
depression. Meta Brown, et al., argues that the value of higher education has not diminished but
if tuition keeps rising, it will. That will make students less likely to pursue a degree and in result
make the coming generations less educated. According to WordPress the United States is ranked
number 14 among 40 other countries. One might say that, that is a high achievement considering
there are more than 200 countries in the world. However, the United States has the most

powerful economy and military in the world. With that being said, the world is being led by a
country that may not have the most qualified people to do so. That not only puts the nation at
risk, but in reality it has the potential to have a very big negative impact on the world.
Matthew Reed and Debbie Cochranes research indicates that one of the factors that
influence student debt is family resources. They found that approximately four-in-ten households
(37%) headed by an adult under 40 years of age have student debt. Households who make more
money can more easily afford higher education and vise-versa for the households who make less
money. Reed and Cochrane also point out that tuition rose 14% from 2011 to 2012. Brown, et al.,
say educational debt is now the second largest liability on household balance sheets, after
mortgages. (pg. 18) They also claim that high student debt is associated with a negative effect
on borrowers home purchases and other debt payments.
It is obvious that students themselves are the ones who are affected most by rising tuition.
They are the ones that must acquire student loans and must begin to pay them back as soon as
they graduate. Thomas Mullers researches how college students perceive student loans and his
results showed that students saw student loans as necessary and mandatory which are
associated with a negative perception, however, they also said they were needed to be successful.
He states that companies and schools should use his study to try to get students to have a more
positive perception of loans which will allow them to focus more on their school work and less
on trying to pay back the money they owe. Christopher Avery and Sara Turner state that if
students were to stop borrowing money they would be less likely to graduate because they would
not have anything at stake and therefore, they would not be motivated enough to graduate.
Brown, et al, points out that the value of higher education can possibly decrease in the
near future if tuition prices continue to rise. If the value does decrease, it is likely that college

graduates will have a harder time paying back their student loans and getting out of debt. That
could discourage many from enrolling in higher education, and again, those who would be
affected most would be the students themselves. Pamela Burdman says Students who fear
borrowing may not seriously consider the benefits of higher education (pg. 2). If students do
not pursue higher education because they have a fear of borrowing, it will allow them to have
fewer job opportunities which means they will be stuck with lower paying jobs. If the majority of
people settle for lower paying jobs, it will not only decrease the value of higher education it
will also force higher education institutions to increase tuition in order to keep the earning the
same income.
Student debt is a complex problem that does not have one single cause. Burdman claims
that although rising tuition is one of the major causes of student debt, so is the lack of help from
the government to students of lower based income. She says that because high school students
are not being prepared enough, it impairs their ability to search for scholarships and grants that
would help them finance higher education and prevent them from being in debt. However Avery
and Turner disagree. They say it depends on the student whether or not borrowing money is too
much or too little. They claim that low tuition schools have a low graduation rate because
students are not motivated because they do not have an urgency to pay loans back. They also
claim that student loans should be seen in a more positive light because Enrolling in college is
likely the first major capital investment that young people will make. (pg. 188)
Just as student debt does not have one single cause, it does not have one simple solution.
Williams claims that the way to lower student debt is to make student loan companies lower their
interest and have the government provide more financial aid. Burden agrees with him and says
the government should make more grants available. She also says learning how to finance, pay,

and acquire student loans should become part of high school curriculum so that high school
students can be more prepared. Burdman also says that loan programs should be redesigned to be
more attractive and efficient to lower-income students so it will help minimize the negative
perception on student loans. That solution from Burdman ties into Mullers claims that if
students begin to see student loans more positively, they will more easily pay them off and not be
in debt. Avery and Turner also believe that if student loans are seen more positively, students are
more likely to succeed. Reed and Cochrane do not mention any specific solutions. The first step
to reducing student debt is to make higher education a priority in the legislative branch of the
government. If the government was to grant more money to higher education institutions as well
as to students, higher education institutions would not have a reason to raise tuition which would
result in students having to borrow less. Now one can say that the nation already has a lot of debt
and it cannot afford to borrow any more money. As of September 30, 2015 the United States
national debt was over 18 trillion dollars. Although it is true that this is a historical debt, the
United States spends 15% of the national budget on the Department of Defense. It is undeniable
that national defense is one of the most important departments to have properly funded, however,
what is the point of having the most powerful military in the world if the United States is not the
most powerful at home?
All of the authors write from different points of views, however they all agree that
student debt is a rising issue that will affect the nation, and world, if it is not addressed soon and
properly. Although they all agree that it is an issue, not all agree that it should be fixed in the
same way. Mueller and Avery and Turner think that student loans should be seen more positively.
Williams and Burdman believe that the government should provide more aid. Meta, et al, Reed
and Cochrane do not offer a possible solution. It can be safely said that student debt will continue

to rise and affect college students lives until the causes begin to be addressed. The nations
ranking will only worsen if higher education does not become a priority to the government. It is
true that loan companies have a lot to say when it comes to reducing interests and it will not
benefit them if students begin to borrow less, but the government can implement laws to make
sure loan companies keep steady rates.
Student debt will continue to affect the lives of millions of students and their households
until higher education becomes more affordable. The nation will not be able to continue keeping
the status of the most powerful country in the world if it lags behind 14 other countries. The
value of higher education in the United States will decrease but the world will not follow.

WORKS CITED
Avery, Christopher, and Sarah Turner. "Student Loans: Do College Students Borrow Too Much
Or Not Enough?." The Journal of Economic Perspectives 26.1 (2012): 165-192.
Brown, Meta, et al. "Measuring student debt and its performance." Student loans and the
dynamics of debt (2014): 37-52.
Davies, Emma, and Stephen EG Lea. "Student attitudes to student debt." Journal of economic
psychology 16.4 (1995): 663-679.
Mueller, Thomas. "Changes to The Student Loan Experience: Psychological Predictors and
Outcomes." Journal of Student Financial Aid 43.3 (2014): 4.
Reed, Matthew, and Debbie Cochrane. "Student Debt and the Class of 2011." Project on Student
Debt (2012).
Williams, Jeffrey J. "Student debt and the spirit of indenture." Dissent 55.4 (2008): 73-78.
Burdman, Pamela. "The student debt dilemma: Debt aversion as a barrier to college access."
Center for Studies in Higher Education (2005).
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"Ranking America." Ranking America. WordPress, n.d. Web. 18 Apr. 2016.
"Congratulations to Class of 2014, Most Indebted Ever." WSJ. Wall Street Journal, n.d. Web. 19
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