woman grimacing in frustration

Massive debt is something that looms over the lives of most Americans these days. American capitalism and the expanding wealth gap has made it fantastically difficult for the average citizen to live a completely debt-free life. This becomes even more depressing when it’s revealed that most of this debt was taken to cover expenses to improve quality of life and get closer to achieving the mythical American Dream: buying a home, reliable transportation, education and so on.


Pursuing higher education in the form of 2 or 4 year colleges and universities in the U.S. has become something that American culture has convinced most Americans to strive for as a way to move up the economic ladder. But when you consider that those who chose to formally educate themselves to climb the social ladder are now collectively saddled with $1.8 trillion in loans, the math all of a sudden doesn’t make much sense.

When higher education is sold as a vehicle out of poverty only to put those same people into tough economic conditions, the fundamental wealth gap problem between whites and non-whites is only exasperated.

According to a 2020 study from the Student Borrower Protection Centre around 72% of Latino students have taken out student loans to be able to attend college.

We asked the Luz community what their experience with student loans has been, and the answers were as depressing as you would expect. This informal survey also found some interesting points of view on the role of education, proposed student loan forgiveness, and the Biden Administration’s handling of the student debt crisis.

When asked about the role of higher education, the consensus was that 2 and 4 year university helps but isn’t necessary:

While higher education can certainly give you a leg up, especially if you’re trying to enter a highly competitive or specialized industry, there are other types of education that are more accessible and that also have high market demand. As the world evolves, and industries change, the need for trained professionals with skills that aren’t taught in universities increases.

Additionally, not everyone has the same goals or aspirations yet schools routinely attempt to track all kids into college except for a disproportionate amount of kids of color who were tracked into vocational classes when trade schools were largely seen as “dumping grounds” for them. When the landscape for specialized trades turned into lucrative careers, pushing kids of color into those classes stopped.

That didn’t stop higher education institutions from convincing everyone that even with the changing labor market, 2 and 4 year colleges were still necessary. With the recent growth of career sectors in tech, creative fields, and trades like green energy, however, many more employers are reporting that experience is more important than a college degree. And major employers like Apple revealed in 2019 that half their workforce didn’t have a college degree.

So this begs the question that many are now actively considering: is it worth taking on tens of thousands in student loans when there are alternate routes that can also lead to lucrative careers?

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So now that the economic damage is done, how long does it take to pay off student loans?

The answer to this question is very much, it depends. Managing student loan debt is complicated. It’s almost as if making student loans complicated to pay off will continue enriching the government and private lenders, but they would never do that (sarcasm included).

Most survey respondents agreed that it will most likely take them the rest of their lives to pay off their loans.

This is a reality that many student loan holders have accepted. Yet student loans aren’t the only thing people need to pay. Some have families to support, other responsibilities, and life obligations which means they can’t pay the loans off quickly. Not only does this stagnate the economy because too much of their income is tied up in student loan payments, but because they aren’t able to pay the maximum amount to pay off the loan faster, capitalized interest accrues, ballooning the debt to amounts that are often much higher than what they originally borrowed.

Allowing capitalized interest means that when accrued interest isn’t paid, it rolls over into the new year, is added to the principal balance, which increases the balance that is then subject to even more interest. It’s interest upon interest upon interest over and over and over again. Loan sharks are cheaper than this.

If there’s something most of America can agree on (except for the federal government and private lenders), it’s that no one should ever have to go into a lifetime of debt in an effort to educate themselves to improve their lot in life.

The American student loan system has created a nation of indentured servants.

Is the current administration helping?

Simple unanimous answer for this one. No. Pausing the loans only makes people more nervous for what’s to come next and simply delays the massive economic burden that so many are carrying.

The only way to actually help at this point is to fulfill campaign promises and forgive student loans all together. While Biden didn’t promise to forgive all debt, he did promise to address at least $10,000 immediately. That hasn’t materialized. The Biden Administration is now also arguing that they can’t forgive the debt without a bill from Congress. Senator Elizabeth Warren and others disagree, noting that “the law is pretty clear that the secretary of education has the authority to compromise — that’s the term — which means effectively cancel any individual debt of up to $1 million.”

What this means is that while an additional student loan pause through May 1, 2022 was helpful, it doesn’t actually solve any problems and just delays the inevitable. People throughout the country continue to call on the Biden Administration to cancel student loans.

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The pandemic brought relief to some, and even bigger problems to others

Like with most problems that came from this pandemic, some found temporary solutions, some found bigger problems. The pausing of the payments during the pandemic helped some save up money that would go towards paying them later. Others found that this temporary pause wasn’t really a relief since the pandemic brought so much financial instability that saving up money was impossible, while the loans were still looming in the near future.

This reiterates that student loans continue to be a massive albatross that’s hanging around American’s necks.

This is occurring at a time when the pandemic increased the wealth of the richest 400 Americans by 4.3 trillion dollars while millions of Americans wonder how they are going to pay rent and mortgages AND their student loans after the student loan pause expires.

Student loan forgiveness would give people the quality of life they deserve

When asked what the Luz audience would do with the money that goes to student loans if they were forgiven, the answers were eye opening. Everyone answered a variation of the same thing, “I need this money to give myself and my family a good life.” They went from being able to buy a home to paying for their kids’ college education to actually being able to save up for emergencies.

It’s painfully obvious that student loan holders need relief and this relief would immediately boost the economy while also increasing the quality of life for millions of Americans. It will take clear political courage and a strong moral compass to do for individuals what is routinely done for big business in America.

Even for the people that have already paid them off, forgiveness for those that haven’t is popular.

We have all heard a variation of that argument before: “Well I already paid them, so if I did it, everyone should be able to, or it’s not fair that I had to pay them and other people won’t.” The mentality within the Latino community appears to be different. As is often the case, the Latino community proves to lean towards group empowerment. The responses to the last question Luz posed to our audience, “If you already paid off your student loans, how do you feel about others having their loans forgiven?” were along the general theme of “I’m all for it!” It seemed the general sentiment was a belief that if others don’t have to suffer through what they did, then everyone is better off.

test image screenshot of an instagram poll

It’s clear that there’s a very simple solution to a big complicated problem and that’s full student loan cancellation. Time will tell if the Biden Administration listens to what people are saying and does right by student loan borrowers and the economy.

Student loan forgiveness would result in dramatic economic improvement to communities that have historically been cut out of wealth creating opportunities, and put an end to the economic punishment that so many have endured for choosing to purchase the dream America has been selling.

It’s seems the costs are more than anyone bargained for.

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