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Student loan forgiveness has become a hot topic in recent years, particularly in the United States where student debt has reached a staggering $1.7 trillion. Higher education costs have skyrocketed in recent years resulting in students graduating with massive amounts of debt that they can’t afford to pay back. As a solution to this crisis, the Biden-Harris administration has announced a student loan forgiveness program.
While some experts believe that forgiving student loans would only be a temporary solution, others argue that it’s a necessary step towards providing relief to millions of young borrowers struggling with student loan debt.
This blog will explain why student loan forgiveness is not a solution to the student debt crisis.
How big is the Student Loan Crisis?
There has been an explosion in borrowing in the last couple of decades. And the primary reason for this has been the mounting education costs. The cost of a four-year degree at a public college has grown from $4,160 to $10,740, while the fees in private colleges have increased from $19,360 to $38,070. As tuition costs rise, the need for financial aid and student loans increases.
Also, read our blog: Student Loan Crisis in the United States- The Problem
The following student debt figures explain the gravity of the student loan crisis.
- $1.75 trillion, including federal and private loans, is outstanding in student loan debt
- Over 4 in 10 people in the US leave college with debt.
- The median amount of debt is between $20,000 and $24,999
- Federal student loans account for 92% of all student debt; private loans account for the remaining 8%
- 55% of students from public institutions took student loans
- 57% of students from private non-profit institutions had student debt
Now, let’s have a look at the top 5 states with the highest average student loans:
| State | Average debt | Total debt |
| District of Columbia | $54,945 | $6.5 billion |
| Maryland | $42,861 | $35.9 billion |
| Georgia | $41,639 | $68.6 billion |
| Virginia | $39,165 | $42.4 billion |
| Florida | $38,459 | $100.9 billion |
What is Student Loan Forgiveness?
In August last year, president Joe Biden announced a student loan forgiveness program to write off federal debts. The proposal was given to offer relief to millions of borrowers, offering student loan forgiveness of up to $20,000. This program allows borrowers to have their student loan debt canceled or discharged without having to pay it back.
The primary reason for introducing a student loan forgiveness program is to give relief to low- and middle-income families. It helps borrowers who are at great risk of delinquency, helping them transition smoothly to repayment.
Most people who have defaulted on paying their education loans are unable to find jobs that pay enough to cover their monthly loan payments. Forgiving student loans are offered as a solution to get them back on their feet and start contributing to the economy.
How does Student Loan Forgiveness help Job Seekers and New Graduates?
Student loan forgiveness is like a lifeline for new graduates who are struggling to find work in their field. If the burden of student loan debt is lifted from their heads, they can take choose to find a job matching their skills and interests rather than settling for the highest-paying job that pays just enough to cover their loan repayments.
Additionally, it can help stimulate the economy by freeing up the money that is otherwise spent on loan payments. Borrowers who no longer have to make the loan payments can use that money to invest in their future or careers. They can also use it to uplift their life by buying a house, etc.
Why is Loan Forgiveness not the Solution?
While student loan forgiveness may seem like a simple solution to the student loan crisis, it is not without its drawbacks. The biggest issue with loan forgiveness is that it doesn’t talk about the root cause of the problem, which is rising unemployment among college graduates.
Many universities charge exorbitant tuition fees, and students have no choice but to take out loans to pay for their education. However, the education that they receive is often inadequate and does not prepare them for the job market.
There is less focus on practical and industry-focused education. As a result, many graduates struggle to find employment in their field of study and are unable to repay their loans. This creates a vicious cycle, where students take out loans to pay for an education that does not adequately prepare them for the job market and then struggle to repay those loans when they cannot find employment.
Also, read our blog: Why do Tech Companies not Hire Computer Science Graduates?
Solution to the Student Loan Crisis: Providing Education for Employment
The student loan crisis is a pressing issue arising from students struggling to repay their loans after graduation as they don’t have good employment opportunities. Universities and colleges admit students taking higher tuition fees, but the fees don’t equate to any meaningful employment for the majority of graduates because:
- The curriculum is focused more on theoretical principles and less on practical application.
- No experience of working on projects and hands-on exposure is given to enhance a student’s ability to work in a real-life work environment .
- The job market is evolving fast, but colleges fail to modify and align their courses as per these changes.
- College degrees don’t teach how you can market yourself and connect directly with employers.
As long as college students remain unemployed after graduation, they will continue to accumulate debt, and forgiving student loans will only be a band-aid fix and not a long-term solution.
Also, read our blog: Student Loan Crisis in the United States- The Solution
One way to help people pay their loans is by making them eligible for high-paying technical jobs so that they can pay their loans as quickly as possible. For this, the state should promote vocational schools and technical training bootcamps like SynergisticIT, which prepare the students for the job market.
Their short-term programs offer affordable, industry-focused training leading to well-paying jobs without needing a four-year degree. The CIRR data suggests an employment rate of 71 percent of coding bootcamp students within 180 days of graduation.
By expanding access to these types of programs, the state can offer more opportunities for students to succeed without taking on large amounts of debt.
Vocational/technical training is cheaper than a CS degree
Compared to a college degree, a training program is cheaper. The tuition of training programs is between $12k-$30k, which is lower than the cost of a single year of CS degree, which can range between $20k to $60k per year. By opting for alternate education programs, many students can cut down on the high tuition costs that put them under the burden of student debt.
Learn job-ready skills in less time
Coding bootcamp programs like SynergisticIT are designed to teach students the skills they need to excel in today’s job market. They focus on skills that are relevant to the jobs and in demand. By teaching students technical skills, bootcamp programs ensure that they can find good-paying jobs that allow them to repay their loans.
Aim for high-paying tech jobs
Coding bootcamp training helps students develop skills demanded in today’s job market. This includes skills such as coding, data analysis, machine learning, and website designing. By developing these skills, students can position themselves for a successful career in the tech industry, which is one of the most lucrative industries for any job seeker.
Bridge the skill gap
Bootcamps and technology upskilling programs can help address the skills gap that exists in many industries today. Many employers are struggling to find workers with the right tech skills resulting in higher unemployment in recent CS graduates. By providing students with job-ready skills, bootcamp programs address the skills gap providing benefits for both students and employers.
Develop marketable skills
Bootcamp programs not only train you for a job but help you get a job through their individual career support. At SynergisticIT, career experts from the industry help students choose a job according to their skills and become competent to find employment as soon as they graduate through interview practice, behavioral and cognitive tests, and portfolio creation.
Conclusion
In conclusion, practical, job-focused training is a valuable tool for addressing the student loan crisis. By providing students with the skills, they need to succeed in today’s job market, bootcamp programs can help to ensure that students are able to find good-paying jobs that will allow them to repay their loans as soon as they graduate.
Anytime you want to upgrade your skills and need a helping hand to enter or re-enter the tech workforce with high-demand tech skills, reach out to us. Since 2010 we have helped 1000’s of jobseekers achieve success in the technology sector. SynergisticIT’s career-oriented training programs guarantee fast-paced, quality tech education, preparing you with top-notch skills for coveted tech roles in the industry. Reach out to us. SynergisticIT- Home of the Best Data Scientists and Software Programmers in the bay area.