Maryland’s struggle to contend with immense loan debt should concern students

By Kennedy Thomason

Elm Staff Writer

The student loan debt crisis continues to reach new heights, holding 44 million Americans financially hostage, according to Maryland Matters.

USA Today reports that the average amount of debt per borrower is $14,296 for those 24 and younger. While it has been portrayed as the younger generation’s problem to tackle, we have become increasingly more aware of the effects of student loan debt on those well over the normal college age.

According to USA Today, student loan debt “peaks for people ages 35 to 39 at an average of $45,703.” The elderly are not exempt from this issue, as the same article reports that “2.7 million seniors ages 62 and older collectively owe more than $112 million in student loans.”

Still, those who chose not to take out loans — or even some who did — argue that it is up to the individual who signed the dotted line to pay off their debt. In theory, this makes sense. However, this perspective fails to recognize the drastic amount of interest that borrowers cannot begin to pay back, and that the ever-rising cost of college has far outpaced wage increases.

Another important component of this problem is how it indirectly affects all Americans, not just those with the loans. By trapping 44 million in a cycle of debt, they become unable to feed our desperate economy. It is becoming as dangerous as it is saddening, considering that when President Biden originally sent out his student loan debt relief plan, “twenty-six million people applied or sent enough information to the U.S. Department of Education” to be considered for debt relief.

“The cost of college attendance has grown 6.8% annually, which is faster than both currency inflation and wage inflation,” according to The Baltimore Banner. But are we truly seeing more bang for our buck?

American families are struggling to survive as they try to pay back their loans. MassMutual says that “nearly half (47%) [of borrowers] said they plan to reduce spending on essentials to make ends meet,” but the truth is, they aren’t even scratching the surface. Most borrowers are not able to pay enough each month to decrease their principal loan amount, so they end up paying interest alone and are still left with tens of thousands of dollars in debt.

Tisa Silver Canady, a financial wellness advocate for college students, said, “believe it or not, most of the people that I’ve met with in the past, I’ll say, six weeks, are over the age of 60 and carrying at least $40,000 to $50,000 in student loan debt.” She also said that the borrowers in these cases routinely tell her “they’d be taking their debts to their graves.”

Debt is not just a financial burden; it is a mental one. The Baltimore Banner warns that we may not be able to fully grasp the mental toll that so much debt can take on a society for generations. “The suffocating stress of debt can greatly affect one’s mental health and ultimately their physical health. This crisis will continue to damage our public health, housing, and economic systems well into the future, with the effects not being fully realized for years to come.”

The negative effects on the economy, and the good ol’ American Dream, are also mounting. The Baltimore Banner reports that those in debt from student loans “are being routinely priced out of homeownership, business ownership, and consumer spending trends.” The elderly are being forced out of retirement, college graduates are unable to afford basic necessities, and 44 million people are unable to support consumerism. And the worst part is, they all believed they were setting themselves up for a successful future.

Students in Maryland should be the most alarmed, as the state carries the highest amount of loan debt per borrower. According to The Georgia Virtue, Maryland college students face “an average debt of $43,116.” With $36.7 billion in student loan debt spread across Maryland, this problem is getting closer to home.

Maryland serves as the perfect case study for another facet of the student loan issue: racial discrepancies. According to The Baltimore Banner, “In the U.S., 86% of Black students are taking out loans compared to 68% of white students. Black students owe, on average, nearly $10,000 more in loans.” To make this inconsistency even more dire, “Black households make up 2.9% of overall wealth in the U.S., while 86.8% of the overall wealth is held by white households.”

These numbers do not just mean that Black students have more debt and less income to pay it back; they cause generational financial stress, as Black graduates are less able to afford homes or start businesses. Baltimore, Maryland’s most populated city, is predominantly Black. Couple that with our ranking as the state with the highest amount of student loan debt, and you have financially crippling racial inequity. “Unsurprisingly, the government has failed to address the racial inequities of the student loan crisis, which are unfortunately embedded in nearly every aspect of consumer issues in the U.S.,” The Baltimore Banner said.

There is some hope that government officials are starting to recognize student loan debt as an urgent issue. Maryland recently passed the Maryland Financial Consumer Protection Act in 2018, which “established a student loan ombudsman” who “acts as a liaison between the borrower and service provider and has the authority to refer any violations to the Office of Financial Regulation or the Maryland Office of the Attorney General.”

The state also added an office that hears complaints from borrowers about their student loan servicing, and established a tax credit, “allowing Maryland borrowers with a minimum of $20,000 student loan debt and an outstanding balance of at least $5,000 to apply for a tax credit.”

Even if you do not carry the weight of student loan debt, millions of Americans urge you to take action by supporting policies and politicians that do not brush this off as poor financial decision-making. The effects are not only the borrowers’ to bear, and racial minorities will feel the brunt of the cost both directly and indirectly. Maryland students deserve better than to have their educational dreams become lifelong financial nightmares.

Photo courtesy of Wikimedia Commons

Photo caption: Calls for the cancellation of student loan debt presently ring out resoundingly nationwide.

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