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COVID-19 highlights student debt crisis, exorbitant cost of tuition
Student loan debt in the U.S. is currently estimated to be around $1.6 trillion. 44.7% of Americans and counting carry an average of $32,731 in student loan debt, which many have argued is far too hefty a price tag for a few years at a university. These figures far outweigh the burden of both credit card debt and auto loans — in fact, student loan debt in the U.S. ranks #2 in consumer debt, right behind mortgage debt.
The global COVID-19 pandemic has taken its toll not only on global health but also on labor markets worldwide. In the U.S. alone, widespread shelter-in-place orders resulted in an unemployment rate of 5.3% in March. Unemployment for the month of April is slated to be released from the government today and is expected to get even worse. A CNN article titled “US unemployment hasn’t looked this bad since the 1930s” includes unemployment estimates from various economists that range from 10 to 20% for April.
This is problematic for a number of populations. The class of 2020 is graduating into what could be “the worst job market for new college grads since the financial crisis,” according to CNBC. A majority of students — 69% in 2019 — are graduating with student loan debt.
How should soon-to-be college graduates be expected to pay these bills when there is a very real possibility they won’t have a job after graduation? And, even more so, how will millions of Americans continue to pay off their student loans when unemployment may be at levels the country has never seen before?
This does not even address the situation many parents of prospective college students are finding themselves in. If they are choosing to financially support their children through college but have lost their jobs due to COVID-19, how will they manage to cover the ever-increasing costs of college? Though price tags vary, the average yearly cost of college for the 2019–2020 academic year was $30,500 in America.
The Editorial Board firmly believes that one of the best ways to remedy this ever-evolving situation is to reduce the amount of money that borrowers owe and to forgive some or all student debt. The $2 trillion stimulus relief package did address the greater weight student debt carries during this time and allows individuals to stop making payments on most federal student loans for six months without additional interest. This “payment holiday” is not enough for many who are struggling financially, especially given that this policy only delays the inevitable.
There is also an issue with the actual tuition and fees that universities charge. Universities across the country are unsure of what the next academic year will look like for them in terms of in-person instruction, and UC Davis is no exception. Emily Galindo, the associate vice chancellor for Student Affairs, informed students via email that “while no final decisions have been made, some or all instruction for all or part of Academic Year 2020-21 may be delivered remotely.” She also noted that tuition and fees have already been set and are not subject to any refunds nor adjustments.
Many institutions, including UC Davis, are cutting down on their services and operations. While we recognize that there are some added costs, such as paying for various video-conferencing services, as well as fixed ones, such as payroll for instructors, there is a very real possibility that enrollment for the 2020–2021 academic year could be lower than that of past years. Prospective and current students may not want to or be able to pay the normal rate for a full or partially online university. Due to remote instruction and out of respect for students’ unique situations, we urge universities everywhere to consider restructuring how current fees are being assessed and charged to students.
If you are a student and your financial situation has changed, we highly recommend that you submit or resubmit a FAFSA form. We feel that the Federal Student Aid office should automatically reassess current applications or notify applicants by email to update their information. We would also encourage students to reach out to their respective colleges’ financial aid offices for further assistance.
This goes beyond student debt — this is a crisis affecting millions of individuals. People are finding themselves in situations they’ve never imagined, and the last thing anyone should have to worry about is university bills. We are hopeful that better days lie ahead.
Written by: The Editorial Board