Jessica: At age twenty-four, Kevin Stump has eighteen thousand dollars of debt. It is all from student loans.
Kevin Stump: I am drowning. I am just trying to keep my head above water. I am not alone – all young people are feeling this.
Jessica: In fact, 37 million Americans are now paying back student loans. Nationally, student debt surpasses all other forms of consumer debt. And last year, the nation’s total student loan debt passed the $1 trillion mark. And yes, that is trillion, with a ‘t.’
Kevin: All they’re saying is, ‘the student debt! It’s a crisis!’ but nobody is saying, ‘here’s how we deal with it.’
Jessica: More than 90% of student loans are made by the federal government. That means the outcome of the presidential election could have a major impact on how young people pay for higher education.
President Obama: Millions of young people all across the country are getting better deals on Pell grants. We’re able to keep our student loan rates low.
Jessica: President Obama has more than doubled spending on Pell grants, the main aid program for low-income students.
The president also supports debt forgiveness. Forgiving a loan balance after a debtor has paid 10% of their income for 25 years.
Mitt Romney: I want to make sure we keep our Pell grant program growing. We’re also going to have our loan program, so that people are able to afford school.
Jessica: Governor Romney says he wants to make the student loan market more efficient. He proposes doing that by using private lenders and giving Pell grants to students who need them the most.
Despite his debt, Kevin is looking to borrow another $2,000 to pay for a master’s degree. He needs it, he says, to get a better paying job so he can pay off his debt. That is another reason the crisis keeps ballooning.
Max Wolf: It’s now a trillion dollar story and counting.
Jessica: Economist Max Wolf says student loan debt is becoming a burden on the entire economy.
Max: Then you either figure out a way to make education affordable again or you go back to having a vast underclass which is uneducated and even more cut off from opportunity, which has social and political implications that are neither pretty nor desirable.
Jessica: And Wolf says in this economy, not having a degree is almost a sentence of poverty. But on the other hand, paying for that degree can sink you into poverty.