Problems in Education: The High Cost and Student Loan Debt


Higher education in the United States is becoming more expensive than the national average cost for goods and services. Salaries at jobs available to university graduates are relatively not as high as before, and the amount of loans available to students does not cover the full cost of many specialties. More students will work for several years, save money, choose a cheaper specialty, or not receive higher education at all and replace the diploma with work experience. Therefore, the paper aims to identify, analyze current issues in the education system, and find possible solutions to combat the problem of student loan debt.

Current Situation

The high cost of education is becoming an insurmountable obstacle for many students living in impoverished areas and low-income families. According to government sources, student loan arrears exceeded $ 1.3 trillion (Ulbrich & Kirk, 2017). An excessive student loan can affect students’ career choices, reduce their quality of life, contrarily affect their capacity to return to school or pharmaceutical college, and slow progress towards other financial goals. “After all, approximately two out of five US adults (38%) paying off student loans are unable to save for retirement” (Ulbrich & Kirk, 2017, p.1). Destitute quality of life, side effects of burnout and sadness, emotional fatigue, and developing criticism were commonly related to the developing understudy or inhabitant obligation for instruction.

State and government reserves are utilized incapably, whereas explicit instruction remains extremely low, particularly compared to private education. As a result, understudies who graduate from public schools have fewer openings to go to and do well in college than understudies who graduated from private schools. Besides, higher education cost is not affordable for many students. College tuition continues to rise, and students cannot afford to pay for college education while teaching children becomes an overwhelming burden for many families. The social gap is widening, leading to the exclusion of students from lower-class families from college. College tuition fees are becoming a barrier to students from underprivileged families. In this regard, high tuition fees are among the main factors that place students in an unequal position and deprive them of equal access to higher education.

Academic Performance

With the rising cost of college tuition in the United States, many higher education teachers are concerned about the potential impact of financial stress on students’ achievement. Students with financial concerns may exhibit a lower commitment to purpose, academic activity, and persistence. High student loan debt and financial stress were associated with an increased likelihood of dropping out or reducing course workload. Financial problems have also been associated with increased time to complete degrees, which could further increment college tuition costs.

The expected student loan debt was not significantly related to the GPA received, but there was a significant effect of financial stress on the post GPA. This relationship was tested using financial stress measures as a continuous predictor and a separate model by comparing the effects of moderate and high financial stress with low financial pressure using a categorized stress variable (Baker & Montalto, 2019). Medium economic weight was significantly negatively associated with the latest GPA. When a three-level indicator of relative financial stress was used as a predictor, the results showed that only students reporting high financial burdens had significantly lower average scores than students reporting low financial pressure.

Ethical Inequality in Financial Support

Racial differences are also widening, depriving minority students of the opportunity to pursue higher education. In this respect, minority students and African Americans are at a disadvantage. Student loan trends and financial stress vary by race, ethnicity, and gender, indicating possible disparities in college financial support. One study shows that black undergraduate students borrow $ 30,000 or more in student loans, which may reflect lower access to other forms of financial aid (Baker & Montalto, 2019). Conversely, Hispanic and Asian students may no longer be inclined to take student loans, even if other sources of financial aid do not cover college tuition costs. Despite the existing programs for minority and low-income people, they are ineffectual, and social and racial crevices endure.

High reliance on student loans is associated with an increased risk of dropout. According to Baker & Montalto (2019), “student loan debt was associated with reduced academic performance among Students of Color, but not among White students” (p.119). It suggests that structural inequalities in college funding may have implications for academic achievement. If students of color have limited access to institutional or family resources to pay for college tuition, this can increase the burden of loan addiction. On the other hand, fears of loan addiction can be exacerbated by other stressors that disproportionately affect students of color, such as racial discrimination.

Development of Society

The need of low-income families to get higher education is unsafe for the assist improvement of US society. The extending hole between understudies and the lack of access to education will lead to social and racial clashes in American society. The government ought to create competent state and government help programs that can give all understudies a rise to openings to get to higher instruction and seek after higher education to reach their full potential. On the other hand, the biggest issue is the productive utilize of open reserves. In this respect, the open investigation can be a valuable degree that gives understudies in require way better openings for higher instruction. Community individuals know superior to the state or government in which understudies need offer assistance, and neighborhood communities ought to be able to use open stores to assist understudies in need. Subsequently, accessible funds must be reallocated at the local level to supply students with considerable budgetary help to proceed with their considers and go to college.


During the Great Recession, a concurrent rise in suicide rates accompanied the increase in student loans. The rise in student loan arrears heightened students’ frustration and failed to meet their expectations. After graduating, many students expect to find work that will provide economic independence and the ability to pursue life goals, such as buying a house or a car, starting a family, or saving money for retirement. However, student loan arrears, and especially student loan delinquency, make it less likely that graduates will be able to meet these goals, which could lead to a higher risk of suicide. For instance, only 55% of students who plan to pursue a degree can do so within six years of graduating from high school (Jones, 2019). Potentially more dangerous are situations where students take on student loan debt but do not complete their degree, exacerbating repayment. While higher education is a possible route to better economic prospects, not pursuing a degree or taking a student loan is likely to reduce the positive return on investment in education.

Companies Engaged in Assisting Student Loan Debt

The tax advantage came to one company in late August 2018 when the IRS issued a private letter to Abbott Laboratories, an Illinois medical company. This company allowed an employer to make a tax-free contribution to an employee’s retirement plan when the employee pays off student loan arrears. When an employee contributes 2 percent of their salary to student loans, Abbott will donate 5 percent (Min, 2018). It was an unprecedented petition, but being a private letter, it only concerned Abbott, making it meaningful to one company. This inspired supporters of significant employers and HR professionals who hoped the decree would set a precedent for broader reforms. The recently issued private letter is a substantial step in the right direction, but ERIC believes more employers will be encouraged to implement retirement savings programs to assist student loan repayers.

In addition, is the absolute leader among Fortune 500 companies that have undertaken student loan repayments. The company has used the money to hire new engineers, expand its sales team, and launch new products, including a platform focused on the healthcare sector, and the problem of student loan debt is acute. Thompson mainly invested in the company’s software. Most significant employers want a unique student loan repayment plan. Companies similar to have also emerged, for instance, the Boston-based company Gradifi, Student Loan Genius, which has launched its student loan repayment programs (Min, 2018). Therefore, it is necessary to actively support such companies that provide assistance to the younger generation and disseminate information about the existence of these programs to parents.


This solution allows borrowers of federal student loans to receive a lower interest rate throughout their maturity. This concept came from the mortgage market, where refinancing usually combines a lower interest rate with a longer sophistication. On the other hand, offers for refinancing higher education typically do not include an extension of the term of study. This offer will be most effective when combined with lower interest rate ceilings for all prospective federal student loan borrowers. One way to think about the implications of refinancing is to consider which borrowers currently have student loans with interest rates that will decline if refinancing is possible.

Volunteer Works

Students try to pay off their loans by working part-time; however, it costs a lot of effort and stress and brings them the least income. Thus, offering volunteerism in exchange for paying a loan will benefit both the individual and society. For instance, a nonprofit startup called encourages students to volunteer in the community, and in return, the company will help pay student loans to volunteers. works with donors across the country to help fund qualified alumni committed to assisting nonprofit organizations in local communities.


Rising costs of higher education ended up the subject of heated wrangle among politicians and the public. Students should be able to proceed with their college instruction based on their scholarly abilities and potential, instead of their money-related circumstance, social status, or other components such as the social background. Therefore, government and organizations must be involved as well as students in solving the financial situation in educational institutions.


Baker, A. R., & Montalto, C. P. (2019). Student loan debt and financial stress: Implications for academic performance. Journal of College Student Development, 60(1), 115-120. Web.

Jones, R. W. (2019). The Impact of Student Loan Debt and Student Loan Delinquency on Total, Sex‐, and Age‐specific Suicide Rates during the Great Recession. Sociological Inquiry, 89(4), 677-702. Web.

Min, S. (2018). Behind the student loan debt crisis, new benefits solutions. CUNY Academic Works. Web. 

Ulbrich, T. R., & Kirk, L. M. (2017). It’s time to broaden the conversation about the student debt crisis beyond rising tuition costs. American Journal of Pharmaceutical Education, 81(6). 1-5. Web.

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ChalkyPapers. (2022) 'Problems in Education: The High Cost and Student Loan Debt'. 30 June.


ChalkyPapers. 2022. "Problems in Education: The High Cost and Student Loan Debt." June 30, 2022.

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ChalkyPapers. "Problems in Education: The High Cost and Student Loan Debt." June 30, 2022.