The Weight of Higher Education and the Student Loan Crisis 

By Destiny de la cueva & Marissa Roberts

It was 1989 when Jay Wilhite decided to make the journey to pursue something that many high school graduates hope to attain – a college degree. 

Wilhite spent some time as a student at the University of Utah before dropping out to work in a warehouse for a few years. After deciding that his future did not lie in the warehouse building, he revisited his college plan, this time, at Boise State University. 

Among the many memories Wilhite has about his college experience, there is one that he shares with millions of Americans today, and that is the weight of carrying student loan debt. 

Wilhite went on to graduate in 2002, leaving with a diploma in one hand and $85,000 in student loan debt in the other. Now, 24 years later, Wilhite estimates he still has two years from paying off his student debt completely. 

Today, the average cost of attendance at a public four-year university is $25,707 per year, according to Education Data. The yearly cost to attend a private college is more, averaging at $54,501. 

When broken down further, there are stark differences in which groups are taking out the most loans and struggling to keep up with repayments. 

Millennials have taken out student loans more than any other generation before them. They currently hold 30.39% of the national student loan debt second to generation x, which currently holds 38.74% of the debt. 

Black and Latino adults were more likely to have to take out student debt than White adults.  Women were overall more likely than men to have student loan debt after graduation and currently hold 58% of all student loan debt, according to data collection by the U.S Census Bureau.

“There are people who are disproportionately affected by the student debt crisis, that’s women, communities of color and low income folks,” said Sabrina Calazans, Managing Director for the Student Debt Crisis Center. “We know that student debt is an intergenerational issue. It’s a racial equity issue, a gender equity issue, and it affects mental health.” 

Student loans have become a multigenerational burden for many. Those who choose a degree and have to take out loans are often prevented from accomplishing milestones, such as purchasing a home. Others choose alternative paths, such as vocational training or avoiding education altogether. 

With the cost of tuition increasing, undergraduate college enrollment has been in a decline since 2010. CNBC reported in 2022 that enrollment dropped by 9.4% from 2020. 

As the years pass, student debt in the United States continues to grow and college tuition continues to increase, but it was not always like this. In order to truly understand the current student debt crisis, we need to understand how we got here in the first place 

It may surprise some to know that federal student loans were created in direct response to the Soviet Union being the first to make it to space with their rocket Sputnik in 1957. 

President Dwight Eisenhower asked Congress to create the National Defense Education Act, which allowed the government to give $1,000 loans to students pursuing a degree in mathematics or science. They realized that up until that point, only students who could afford to go to college were getting their degrees, and if they wanted to compete in the space race, they would have to produce more scientists and mathematicians.

Soon after, the program was expanded to include all majors, and from there the student loan industry was born. 

President Richard Nixon created a loan servicer called Sallie Mae in 1973 as the demand for federally-backed student loans grew. The company privatized in 2004, meaning higher interest rates for borrowers and their loans are no longer backed by the government, according to Now This News.

Americans now owe a collective 1.6 trillion dollars in student loan debt, according to the Federal Reserve Bank of New York. 

Years after Wilhite graduated, he received a notice that the federal loans he took out with Sallie Mae were being transferred to a private company called Navient. There were times when he recalled hitting financial hardship and not getting any help from his loan servicer. 

“It would have been great to be able to, you know, make some changes to my payment schedule then. But, they weren't very cooperative in that,” Wilhite said. 

When the pandemic hit he was told that he was not eligible for certain deferment programs or other financial relief. After years of disappointment in the treatment he received from Navient, a company that recently settled a lawsuit for predatory loan practices, Wilhite did some research and found that he was able to transfer his loans back to a federal loan servicer.  

Now that he is back with a loan servicing company that is eligible for more benefits, Wilhite said that he was able to apply for President Joe Biden’s student loan forgiveness program. 

Last August the Biden administration announced a plan to alleviate some student debt with a three-part proposal: student loan forgiveness, change the student loan system so that monthly payments are reduced and loan forgiveness is expanded for certain professions and lower the cost of college by increasing federal grants like the Pell Grant and making community college free. 

They planned to cancel $20,000 in federal loan debt for students who received a Pell Grant award and $10,000 to anyone making $125,000 or less in yearly income. 

More than 26 million people applied for the relief and 16 million people were approved by the administration after the initial round of applications.

In response, a slew of lawsuits were aimed at the Department of Education to block the program. Some were thrown out for lack of standing, but two prevailed: one from Republican-led states that claimed the program was an overreach of power and the other backed by Job Creators Network Foundation claiming that the program excluded certain people. 

Both parties went in front of the Supreme Court to deliver their arguments, but it is unclear when the court will make its ruling. 

Senate Minority Leader Mitch McConnell criticized Biden’s plan in a statement last September. 

“President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt,” he said. “This policy is astonishingly unfair.” 

On the other side of the aisle, Senator Elizabeth Warren, who has been a proponent of student loan cancellation, praised Biden’s proposal. 

“Student loan debt has held millions of Americans back from starting a family, buying a home, saving for retirement, or creating their own businesses,” Warren said, “With the President's action, millions of workers… will breathe a little easier knowing this burden will be lifted. 

While some argue that student debt forgiveness is unfair to those who have already paid their loans off, Wilhite, with just a few thousand left to pay, disagrees. 

“I say that's a ridiculous argument, frankly,” said Wilhite. “I think it's the most selfish, ridiculous argument to say, ‘Well, I didn't get free school. So why should these be free now?’”