Micro-Activity #14: Continue Drafting the Annotations

Do students risk going into debt they can’t pay back or miss out on the benefits of a college degree?

Hess, Abigail. “How Student Debt Became a $1.6 Trillion Crisis.” 

, CNBC, 12 June 2020, 

The article examines the main point of how severe student debt is and how $1.6 trillion in debt is affecting over 44 million Americans to this day. Abigail Hess identifies how that college is expensive and poses a question on if it is worth dealing with going into debt that can’t be paid back or miss out on the benefits of a degree. Historically, the study shows that the 2008 recession made the cost of a four-year college degree increased by 25%, and student debt increased by 107%. Additionally, from the economic recession to the stability of the economy in 2018, college costs as well as college debt increased significantly. According to The College Board, college students graduate with an average of $29,000 in debt. These data point out how temporary financial help can lead to permanent financial hardship, for the individual, and the country. When identifying the history of student debt racially and financially, Hess includes how 598,000 students enrolled in colleges in 1919, and the majority of students remained wealthy white men, despite Black colleges and women colleges existing since the 1830s. In 1954, the Supreme Court ruling of Brown v. Board of Education decided to end the “separate but equal” doctrine and make school segregation illegal so more Black students can earn their degrees. Going into the Reagan Era and the Tax Revolt in the 1980s, states passed tax and spending limitations, which made state budgets came under threat and college costs increased significantly, due to  Reagan cutting higher education funding and student aid. During the 1980-1981 school year, The College Board estimates the cost of private college is $17,410 and $7,900 for a public college. By 1990, the cuts increased to $26,050 and $9,800. This illustrates how unfair education was back then for Black people and as higher education evolves into a modern education system, costs increase. To show how students are impacted by this crisis, the author includes a survey that found that 21% of borrows have delayed getting married, 26% of people have to push back on having kids and 36% delayed buying a home. In making this analysis, Hess shows how student debt can affect one’s personal life by having to delay their dreams with themselves or a partner and how overwhelming it is, mentally. 

  I completely agree with the article because It sheds light on how great this crisis is affecting the people of America. People are owing debts that are over 20 years and older and can never get to fully pay it and it affects them in every possible. Recently a video that went viral showed a lady on TikTok finding out that she had paid over $120,000 in debt for 10 years but still owe over $76,000 with 7% interest. It is ridiculous to see that so many people are desperately underwater with their debts. A Columbia University student states “I do have student debt and it is one of the reasons why I cannot even enjoy being a student here because every semester I have to worry if I have enough money to go to school next semester.” Although I haven’t taken out student loans as a college student, I know how stressful it is to have your hardship be played out in your mind every day while you’re trying to focus on your studies and how will you be able to manage for next semester. Also, I know there are many peers in my classes that are going the same thing. One question that I propose to the author is should lenders caution borrowers ahead of time? I’ve noticed that every time student loans are addressed, the borrowers are at fault for dealing with the debt but nobody blames lenders who prey on vulnerable individuals, especially minorities and people with low-income. They do not necessarily breakdown what interest you will have to pay attention to and other fees that can be detrimental. Although I don’t have any questions about this article, I do need to do more research on the Great Recession and what additional efforts the government did to make sure the economy can recover successfully. One thing I would say to Abigail Hess is to thank her for addressing this ongoing, overlooked epidemic. With the help of a few students speaking about their experience with student debt and showing the history and data to prove how serious this problem is, furthermore, this article helps answers my research question. The author’s style of writing is informative and evidential. Hess’ intended audience, is students that are studying economics. This genre of writing is effective and conveys what the audience needs to know because it shows validation to her claim on expensive college costs and loans. 

Nuckols, William L, et al. “Was It Worth It? Using Student Loans to Finance a College Degree.” Higher Education Politics & Economics, vol. 6, no. 1, ser. 1-19, 2020. 1-19, 

This journal explores the process of the lives of graduates who borrowed money for their education from a cognitive perspective, as well as finding research and solutions for accessing education, and economic stimulation for the local and national economies. The main focus is to see if it is worth students using student loans to finance their degrees. Nickols mentions that first-generation, low socioeconomic, and minority students are not financially literate and often do not realize the true burden of student loans until or post-graduation. The authors use behavioral economics to give the psychological point of view when decision-making, financially. Financial aid programs have been seen through a “cost-benefit analysis lens” according to Nuckols and how since there’s access to money and college is affordable, the benefit of the degree should outweigh the debt burden. The author understands that vulnerable students do not understand the complexities of the loan process, due to limited information. Nuckols talks about how education is a facet of consumerism because we pay for our education, therefore we are consumers. When examining Cognitive Dissonance Theory, through consumer behavior, it is important and according to Gbadamosi, a Ph.D., he lists three main conditions that create a feeling of cognitive dissonance: a) the decision must be important to justify the money spent on the product; b) psychological cost must be weighed when justifying the cost of the product; and c) product is relevant to the buyer. Nuckols instructed an online survey for graduates/completers in Virginia who collected some level of student debt. After sending the survey to 22,496 email addresses, only 1,075 responded but 784 completed it. Question 6 of the survey asked, “how long has it been since the completion of you most recent degree or certificate?” It showed that 6% completed in 0-6 months prior, 9% completed 7-12 months prior, 14% completed 13-18 months prior, 11% completed 19-24 months prior, and 60% completed more than 24 months prior. 68% of the study were White, 20% Black, 4% Asian/Pacific  Islander, 3% Hispanic, 1% Native American/Alaskan, and the remaining respondents reported as Other, or preferred not to disclose their ethnicity. The dominant age range of the sample was 23-27 years old (40%). 35% were age 28-35, 14% age 36-45, 10% 46 and over, and 1% reported in the 18-22 age range. In this analysis, it represents the voice and perception of student borrowers, as well as consumer perceptions. Based on the results, many of the respondents were in default for various reasons including mandatory living expenses. Nuckols asks the main question, “Was it worth it?” The participants indicated that their debt was more negative rather than positive. For the negative aspect, they did not believe that borrowing was worth it. The jobs that have were not equivalent to their level of education. One respondent stated that the education they received was worthless, compared to the salary of someone who did not go to college. Others said their higher education experiences were not worth the cost and there was an immediate benefit to their degrees. On the positive aspect, while responses were negative, they agreed that without borrowing money, they would not have been able to graduate with their degrees. They also specified that their degrees carry value, not only in their career attainment but in their compensation. The author concludes that the perception of the value of education in the study was negative, but adds his opinion that the value of education is overwhelmingly positive.      

I agree but disagree with this study. I’m pleased that William Nuckols mentioned financial literacy among those who are not aware of it. Nickols stated, “Students often do not realize the true weight of their student burden…especially for first-generation and minority.” Many students who are vulnerable and in need of immediate financial help, unfortunately, fall into student loans and most likely be trapped. There is not a plan going into it and as long as it sounds good, it will be accepted. It is good that many respondents admitted that they were not prepared and did not have any idea when signing those forms. I understand one of the participants of the study when they said the monthly payment was too much in conjunction with other bills. As a New York resident taxes and bills are extremely high and it increases in a blink of an eye. I would get overwhelmed if I had to deal with monthly payments of my student loans while maintaining other bills to keep me afloat. On the contrary, this document gives me mixed feelings about my question, due to the mixed reviews after the study Nuckols conducted. The author’s writing style sounds persuasive and bias. Yes he did a study and there were more negative reviews than positive, yet he somewhat ignored it and continued to counterclaim why education outweighs all negatives of student loans. However, this genre is effective because it gets people to have more opinions and look into the cognitive part of deciding on accepting these loans, which I feel like many of us do not look into. This document and author is credible because it is peer-reviewed and includes citations and references.