How the Student Debt Crisis is Stifling the American Dream
Paying for college today means needing to take out an extreme amount of student loans, and the impact from the student loan debt crisis is not being felt equally.
Ever since the 1950s, the concept of the American Dream has been grounded in a few basic, but pretty universally understood ideas: get a well-paying job, buy a home and a car, start a family. If you go to school and work hard, the rest of these milestones will fall into place for you.
Maybe in 1958 that was already an overly rosy idea. In 2018, it’s practically laughable.
Today’s Americans – particularly Millennials and new college graduates – have entered an economy where not only is that American Dream not guaranteed in the slightest, but the deck is effectively stacked up against them. To succeed in today’s economy, you need a four-year college education just as a baseline requirement for so many job openings. But getting that degree means paying for college at a time when tuition is getting more expensive every year. Paying for college today means needing to take out an extreme amount of student loans.
How extreme? This year, the total amount of student loan debt in the U.S. hit $1.5 trillion. That’s a daunting number in its own right; when you consider that it’s a 150 percent increase over just a decade ago, it becomes clear that student debt in this country has very quickly reached crisis levels.
Today, three-quarters of student debt holders said their loans have impacted their ability to buy a home. In that same survey, over 40 percent say their loans have influenced their decision to delay starting a family. These are some of the basic building blocks of what we think of as the American Dream, and for millions of people they are becoming increasingly out of reach because of the very education they pursued to help achieve that dream.
Worse still, the impact from the student debt crisis is not being felt equally.
Although 60 percent of student debt holders took out federal loans, black students were overwhelmingly more likely – 78 percent – to need them. Compare that to white students, where just 58 percent – below the overall average and 20 points fewer than black student loan holders – needed to take out federal loans for college.
In an economy where black students are 44 percent more likely to take out student loans than their white peers, and being set up to graduate with more debt than white students, how can we say college is helping to level the playing field and give all students – regardless of race – an equal opportunity at their futures?
Statistics like these are all the more reason why employers today need to put a higher priority on incorporating student loan repayment services into their employee benefits packages.
Vault’s student loan repayment options can not only give employers a powerful new tool for recruiting and retaining employees, but also provide those employees with the debt defiant relief they need to get out from under the crush of student loans and reclaim their future.