Point/Counterpoint: Are student loans worth it? Yes

Point/Counterpoint:  Are student loans worth it?

Yes

Philip Petersen

Columnist

As a person who has spent the last seven years working in the food industry to help support my family, I cannot understate what having an education means to me. Even the hope that I can, through hard work and talent, pull myself out of poverty and into the middle class is of immense importance. While I was lucky enough to qualify for government aid, many students will have to rely on subsidized and unsubsidized loans to pay for college. The average student will graduate with nearly $30,000 of debt, which is more than I make in three years, meaning that even if they are able to find their preferred job on graduation, they could spend years paying them off. 

Paradoxically, as the United States moves more towards a post-industrial economy, the cost of college loans is increasing. High demand and inordinate amounts of debt preclude economic bubbles. We cannot return to an industrial economy so long as the developing world continues developing, so we need graduates. President Obama understands this, as does Senator Elizabeth Warren, both of whom have introduced measures attempting to curb student debt. Senator Warren’s proposal to allow students to readjust their loans may curb the effects of student loan debt (that is if it had not been tabled into oblivion), however, a more long-term solution needs to be found if the US hopes to maintain economic prosperity into the future.

When Japan was faced with a looming student loan crisis, it buckled and rationed education. While this would prevent a bubble, it freezes the number of graduates. This freezes the number of graduates as well as limits opportunities for students to raise themselves out of poverty. Germany, faced with the problem of transitioning to a post-industrial society, has concocted a much more flexible solution. While the United States has some level of debt forgiveness for state workers, like teachers, Germany has a graded student loan forgiveness plan that rewards students for academic excellence and early completion. In fact, Germany has a debt threshold of €10,000 ($12,700), after which, debt is forgiven. In other words, a German student will never have to pay more than the debt threshold, even if they are to accrue more debt during their education. Germany currently stands as the economic engine of Europe and should certainly be an example to the rest of the developed word.

We have to issue an ultimatum, either adjust student loans or fall into depression. We cannot have our current interest rates, an educated work force, and a consumer economy all at the same time. If we fail to come to terms with this reality, it won’t just be indebted students eating ramen for every meal.