Featured Article - Help students think twice before they go into debt by Neetu Arnold

A few weeks ago, President Trump unveiled his 2021 budget proposal. This comprehensive plan includes provisions for every area of the public sector, but NAS is most interested in those pertaining to college debt. Trump has proposed a number of loan regulations designed to curb the ever-growing student debt crisis. While these reforms are unlikely to pass in a majority-Democrat House, NAS hopes that they are a sign of things to come.
 

Every year, more and more college students plunge themselves into a pool (or, periodically, an ocean) of student debt, only to drown for decades to come. They do this for a variety of reasons. Many high-schoolers and their parents are naïve about the post-college job market, thinking that a four-year degree will guarantee a high-paying position. Trade schools and apprenticeships are often written off without a second thought. Students are misinformed, and even misled, about the crippling effect large student loans can have on their lives. College is romanticized as a magical, once-in-a-lifetime experience that is worth pursuing at any cost. It’s not.
 

To be sure, higher education is a worthwhile investment for many, and has been one of the great levelers of society for centuries. This is one of NAS’s core beliefs. However, we also maintain that college is not for everyone, and those who forgo it are not made lesser by this decision. Certainly not if their choice was made to avoid tens or even hundreds of thousands in student loans. Educational frugality should not be seen as compromising “the best years of your life”—it could mean avoiding a piece of America’s $1.56 trillion pile of student debt.
 

In this week’s featured article, NAS Research Associate Neetu Arnold breaks down Trump’s proposed college debt regulations. Among the most significant are “capping loan limits for graduate students and parents of undergraduates, removing student loan forgiveness for those planning to work in public service fields, and eliminating subsidized student loans.” Arnold also explains both sides of the cost-benefit analysis coin that trip students up: they overestimate the benefit of a college education and underestimate the adverse effect of substantial student loans. This vicious combination leaves many young adults stranded with no end in sight.
 

The student debt crisis is spiraling out of control. To stop this spiral, government subsidized debt must be limited and colleges should acquire responsibility for students pushed into indebtedness. We can’t stop students and their families from making foolish choices, but we can make their doing so less likely through financial education and proper restrictions.
 

Until next week.
 

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