The national student loan debt has reached a record high at $1.465 trillion, more than doubling its 2009 total of $675 billion at the end of the Great Recession.
The stratospheric amount of debt poses significant risk to the United States Department of Education, which acts as guarantor for over 90% of student loans. Should conditions like low unemployment result in widespread defaults, covering the brunt of that one trillion would be a significant blow to the Department of Education and, subsequently, its budget.
According to Bloomberg, the rate of default is highest in 24-33 year olds, who entered the work force during periods of high unemployment rates, resulting in difficulty finding jobs in their field, negatively affecting the return on the investment of an education.
Many of those still paying student loans weren't surprised.
@business Unsurprising. The cost of college is wholly disproportionate to the amount of money you end up making and… https://t.co/6g0Hk6UYQy— R._* (@R._*)1545070571.0
@business Maybe colleges shouldn’t kill us with the ridiculous tuition rates— Nirmal Patel (@Nirmal Patel)1545101395.0
Some say that the debt merits a bailout before the bubble bursts.
@business it’s too big to fail, IRS. where is our bailout?!?— j. dwayne (@j. dwayne)1545059520.0
@business When can we get a bailout like the banks?— Leonardo Jacobs (@Leonardo Jacobs)1545073101.0
@business Forgive the Debt.— BrianArdoin (@BrianArdoin)1545059186.0
@business Let DOD pay it! They seem to be able to pull TRILLIONS out of thin air. $21 Trillion missing. $6.5 Tr… https://t.co/mhVcLS7t5j— FREE ENERGY Ends Central Bank Tyranny (@FREE ENERGY Ends Central Bank Tyranny)1545059970.0
The Education Department agreed earlier this month to forgive $150 million of student loan debt, but out of a trillion, that's a drop in the bucket.
More than a bailout, students and their supporters are calling for something else.
Many say that the student loan system is institutionally flawed and requires serious overhaul if there's to be a hope of sustainability.
@business Borrowers want a system that is fair with real oversight, not forgiveness. I've paid an income based paym… https://t.co/SSCap5sEV1— Sophie Beth (@Sophie Beth)1545078217.0
@business It’s unsustainable. When cats make payments equal to more than half the principal and still owe almost th… https://t.co/0bRQbR8Pj6— nerdy.nel 🇩🇴🇵🇷 (@nerdy.nel 🇩🇴🇵🇷)1545091851.0
@business @snwann Student loans are the biggest scam in America. It immediately puts kids in some serious debt.— Steven L Jackson (@Steven L Jackson)1545073226.0
Some said that higher education is necessary for success and therefore must be made more accessible.
@SenSanders And other countries that are way ahead of us provide low cost or free tuition as an investment toward t… https://t.co/wua2Bfx7Pc— Karena (@Karena)1545088256.0
@business Lol ya'll seen college tuition? Its gonna get worse since colleges are a business. Check out those $400 l… https://t.co/hVrEc3kJQ6— DK (@DK)1545073012.0
@SenSanders The crisis is not in the loans, but in the cost and inefficiency getting a degree. Focus on the core problems not the symptoms.— Richard Quinn (@Richard Quinn)1545094347.0
While there are many ideas on what the solution to this growing problem could be, one thing is clear: Something needs to be done and soon.