Student debt multiplies, showing no decline

Illustration by Mattheau Faught/The Et Cetera

Illustration by Mattheau Faught/The Et Cetera

HARRIET RAMOS, Editor in Chief

The government’s pause on federal student loan payments as part of COVID-19 relief is set to expire May 1.

According to Education Data Initiative, as of August 2021, 42.3 million people in the United States owe money on federal student loans.

An additional 2.4 million owe money on private student loans, which were not paused due to the pandemic.

Josh Mitchell, a Wall Street Journal journalist and author of “The Debt Trap,” spoke at the Feb. 22 Dallas College town hall about the student debt crisis. He said the student loan system is “broken.”

“If you ask anyone what their mortgage rate was and how much they paid for a house, they will tell you down to the decimal point,” Mitchell said. “If you ask students how much they owe and what their interest rate is, no one knows. And they don’t know what the tuition is every year, and they don’t know why the balance is rising. …And all of a sudden, it turns into quicksand.”

Mitchell said student debt in the United States just continues to get worse. The federal student loan program, which started in 1958 as a way to make college accessible to a broader range of students, has resulted in colleges charging higher tuition, which in turn leads to students taking out bigger loans.

“This is a broad problem,” Mitchell said. “And it has very negative consequences on people’s lives, whether it’s their ability to buy a house or their ability to save for retirement.”

According to the Education Data Initiative, student loan debt is growing six times faster than the U.S. economy and totals about $1.75 trillion — up from about $500 billion 15 years ago.

Chancellor Joe May said at the town hall that many families don’t know there are affordable options to get an education, and that is why he helped create the Dallas County Promise four years ago.

The Dallas County Promise is a partnership of colleges and high schools that helps students graduating from participating high schools pay for tuition not covered by federal and state financial aid.

Dallas College also offers early college high school, a program that allows high school students to take college level classes and graduate with an associate degree the same time they receive their high school diploma.

May said there are 3,000 high school students set to graduate with associate degrees this year.

“They can go on in a year or two to get a bachelor’s degree,” May said “And they’re going to work in our public schools and other employers here in the area … making great salaries and they have no debt.”

Dallas College charges $79 per credit hour, which covers textbooks and class supplies. According to the Education Data Initiative, the average cost per credit hour at a private university is $1,092.

Katrina James, the managing director of Dallas County Promise and one of the town hall panelist, said young people and their parents need to be educated about payment options for college education so they aren’t easily led into debt.

“The education around what college costs and what is a grant versus a loan, those kinds of conversations need to happen with students and families in seventh or eighth grade, ninth grade at the latest,” James said. “By the time senior year comes around, there’s not a parent who is fallen into the trap of wanting their student to go to the dream school so that they take on $20,000 a year in Parent PLUS loans and trap themselves. That education piece is crucial.”