At a whopping $1.4 trillion national total, student loans currently hold the silver medal in American consumer debt, second only to home mortgages. This staggering figure looms over nearly 45 million Americans. Student debt shapes a person’s financial future by influencing almost every major decision, including homebuying, employment and even retirement. One way Americans, past and present, realize the American dream is by working hard to receive a degree at a college or university and using that degree to kick off a high-paying career. But recently, for some students the rising costs of college and graduate school has begun to tarnish the luster of graduation day. However, failing to receive any secondary education severely limits one’s financial future, thereby influencing the same major decisions.
In the worst case, the cost-benefit analysis of higher-education presents some students with a Catch-22: go to college and face high student loans, or enter the workforce with a primary education and have a limited earning potential. Scholars, government officials and nonprofit representatives from around the nation will be gathering at the University of Utah S.J. Quinney College of Law to discuss these critical issues on Oct. 20 for the symposium “Financing the Future: The Law and Politics of Student Debt in American Higher Education.”
Many students go to college because it is supposed to pay off. The vast majority of college graduates can find much better and higher-paying jobs than those who do not attend college. Thus, the student’s one-time investment of effort, time and money should result in a net living standard increase. But, the cost of higher education has been steadily increasing in recent years. A degree at the most expensive schools may cost as much or more than a house, and may be funded primarily through loans. Ironically, some of the most expensive schools are for-profit trade schools that spend most of their revenue on adverstising rather than student facilities, teacher salaries and other educational necessities.
Many Utah schools are making great strides in affordable education. For example, the two law schools in Utah, the S.J. Quinney College of Law at the University of Utah and the J. Rueben Clark Law School at Brigham Young University, provide a more affordable legal education than most. Both schools are highly respected nationally and provide great practical opportunities for their students. But even in Utah some struggle with student debt.
The high educational price tag disheartens many current and potential students from attending or continuing higher education. And for good reason. Student debt has high interest rates and is dischargeable in bankruptcy only if the debtor can show “undue hardship.” As a result, too many Americans tragically view the American dream as out of reach.
Students should not face an educational Catch-22. Receiving higher education is a positive experience that can benefit almost everyone. However, fixing the system will take both political and legal reform.
Congress and other governmental entities have begun to advance some reforms, including income-based repayment plans, student communication debt and increased borrower rights.
Further change will not happen without our involvement. Community leaders, including students, universities, employers and government officials need to sit down and find solutions that allow us to obtain a quality education without an unreasonable debt burden.
In order to help Utahns and America itself identify a path forward, the Utah Law Review is hosting the Symposium, “Financing the Future: The Law and Politics of Student Debt in American Higher Education.” Seth. Frotman, the Consumer Financial Protection Bureau’s Student Loan Ombudsman and the Assistant Director for the Office for Students and Young Consumers, will be the keynote speaker.
Thomas Lingard is the executive symposium editor for the S.J. Quinney College of Law at the University of Utah.