Katie Brazis
September 2017

How Did It Get So Bad?

We’ve all heard the numbers so many times that, if you’re like me, you’ve become desensitized to them.

  • There are 44 million borrowers.
  • There is $1.4 trillion of student loan debt and growing.
  • Approximately 7 of 10 college students leave college with student loans.
  • The average college student leaves college with over $30k in debt.
  • About 11 percent of borrowers are in default on one or more of their loans.

If you’re one of the millions of borrowers with student loan debt, these numbers symbolize a harsh reality. You may even be tempted to drink your problems away. (We really don’t recommend that!)

How did it come to this?

The Blame Game

Adam of the College Humor/TruTV series “Adam Ruins Everything” blames the development of Sallie Mae in his video “How College Loans Got So Evil.”

In the video, Adam compares loans to alcohol, featuring lenders passing out student loans in iconic red cups after filling them from a keg labeled “Loans.” The comparison is shockingly accurate — federal student loans are easily accessible and quickly accepted by students, much like they would accept drinks at a party.

Sallie Mae, portrayed as an attractive young woman, first worked with the government to expand access to student loans. She was instructed to buy loans from banks to provide to students who needed the financial aid to attend college — under the direct supervision of a star-spangled Uncle Sam.

Then, when the government decided to cut Sallie Mae free in 1996 — a move Adam describes as a party foul — she transformed into a wild loan distributor, letting her hair down and donning a gold party dress and a carefree dancing persona. She pours her loans from clear bottles resembling hard alcohol instead of from beer kegs. She focuses heavily on advertising, engaging in the following questionable practices:

  • Employing private representatives to act like college employees and steer students toward her loans
  • Bribing financial aid officers with cruises
  • Encouraging students to take on more loans than they need
  • Paying colleges to offer her loans to students instead of federal loans

The Effects of Going Private

This all resulted in the crisis we’re experiencing today. Student borrowers are stuck with never-ending debt, portrayed in the video with auto-replenishing bottles duct-taped to their hands, who experience hangover-like symptoms. No matter how much they drink, the loan bottles are always full.

Adam paints a pretty bleak — but painfully familiar — picture of student loans. But the video points out that federal loans are a necessity for so many students to go to college. And a college degree is a necessity for so many jobs in this economy.

It’s a compounding issue: Rising tuition costs force students to borrow more money to get that necessary degree, which they need to earn more money so they can pay back the loans they had to take out to get the college degree. However, while tuition keeps rising, household income isn’t keeping up, making loan payments that much more difficult to pay.

How Do We Fix This?

The short answer is that nobody really knows. Theories range from making public colleges free and forgiving loans to limiting federal student loan access and eliminating forgiveness offerings.

Others are arguing that high school students should consider skipping college altogether, despite the evidence that a college degree will boost earnings throughout life.

The best we can do is continue paying off our own loans and start planning early for the future generation’s college expenses.

Options are available to help

Most people do not realize that there are programs designed to help those who may be struggling with their student loan payments. Thousands of borrowers have trusted Ameritech Financial to be their advocate. Click here to find out what options are available. Our services could help you get back on track.

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Katie Brazis

Katie is a Content Coordinator with a BA in English and a Certificate in Editing and Publishing from CSU, Chico, and a Certificate in Copyediting from UC San Diego Extension. In addition to her professional history in editing, she has a deep love of stories. In her free time — when she’s not trying to tame the wild beast she calls her cat — Katie consumes stories in any form. She reads books and watches shows and movies. She plays cooperative games, both video and board, with her husband and friends. When she chooses to venture outside she keeps her phone handy to catch some virtual Pokemon.

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