This is the first of a two-part series about the origins, triumphs and burdens of student loans. In the first part, we consider the history, purpose and positive impact of student loans in America.
The college imprint on society is strong. From March Madness and alumni circles, to the middle class, and Greek letter organizations, each represent segments of life, brought to you, in part, by financial aid – and debt. As Americans struggle with student loans, we look at their purpose, impact, and the reality – that the popular road to a degree is unsustainable.
In the 2017-18 academic year, 86% of college students received some level of financial aid, up from 75% in 2000-01. By 2020 approximately 44 million students owed nearly $1.6 trillion in Federal student loan debt and an additional $119 billion from non-backed government sources. The average borrower is about $37,500 in student debt. It gets higher for certain demographics. Both the number of Americans enrolled, and the loan debt have risen exponentially, in the past 20 years, driven by particular times and events.
Albert was about to be famous. He would be among the first and largest living creatures to be launched into space. In 1948 the United States of America, and among other nations, Russia were in the midst of an intense space race to land on the moon. Albert, a rhesus monkey, did not survive the experiment, and it wouldn’t be the last attempt to test life outside of the stratosphere. A decade later, in 1957, Russia (then, the Soviet Union) sent the world’s first artificial satellite into orbit. Sputnik (literally, traveling companion in Russian) about the size of a beach ball, floated in lower space for 3 months before its remaining parts crashed in Wisconsin. The vibration was felt as Americans grew concerned about safety while the space community was more concerned with pride. Something had to be done.
At the center of the space race was power, prestige, and global leadership in the era after the second World War. America’s tone was grave, and movements were put in place to implement a strategy to overtake the growing Soviet space mission. For victory, there would be a new formation, an emphasis on science and technology. Putting this new system in place would require a dedicated army. America needed soldiers that would ensure we were first to the moon, no matter the cost. Legislative and general support was strong. But how would the soldiers and mission be funded? A year later in 1958, the National Defense Education Act was passed. Student loans, especially in the areas of science, technology, engineering, and mathematics, precursor to STEM, were going to relaunch American education. It would push the United States into a new era of data, telecommunications computer technology and aerospace engineering. The move included a new agency, the National Aeronautics and Space Administration. On June 29, 1958, the National Aeronautics and Space Act was signed. NASA was born accelerating the transition from the industrial to a digital revolution (or 3rd Industrial Revolution). A new era was in place.
In 1969, America finally landed on the moon, roughly a decade after a massive investment in education. Today we are still riding on the triumphs of early science and technology. Tools we use today including smart phones, CAT scans and LEDs, even freeze dried foods and Air Jordan’s are here because of aerospace engineering and the competition to land on the moon. The Global Positioning System (GPS), satellite radio, satellite Tv – and the 1962 premiere of the Jetson’s was gifted to us by rocket science. We can thank NASA and its allied research institutions for bringing us into modernity, set off by the early growth of student loans.
It took a space race standoff between the U.S. and Russia to set off the student loan trend. The legacy of student loans abound in firsts and progress. The contemporary world we live in and the manner of which this article is written and presented, an obvious illustration. However, there is more to the story as we consider the financial debt, its impact and what can be done about it.
- Black-white disparity in student loan debt more than triples after graduation, October 20, 2016, The Brookings Institution https://www.brookings.edu/research/black-white-disparity-in-student-loan-debt-more-than-triples-after-graduation/
- Federal Reserve report finds link between increased federal aid, rising tuition, August 15, 2015, USA Today https://www.usatoday.com/story/college/2015/08/20/federal-reserve-report-finds-link-between-increased-federal-aid-rising-tuition/37405655/
- College Football, The Christian Science Monitor, September 2, 1982 https://www.csmonitor.com/1982/0902/090231.html
- Busting the College-Industrial Complex, National Affairs, Winter 2021 https://www.nationalaffairs.com/publications/detail/busting-the-college-industrial-complex
- US House of Representatives, National Defense In Education Act https://history.house.gov/HouseRecord/Detail/15032436195
- How NASA gave birth to modern computing – and gets no credit for it, June 13, 2019, Fast Company https://www.fastcompany.com/90362753/how-nasa-gave-birth-to-modern-computing-and-gets-no-credit-for-it
- Was Reagan Right? Is Financial Aid The Cause of the Student Debt Bubble? December 22. 2015, Forbes https://www.washingtonpost.com/posteverything/wp/2014/09/02/my-students-pay-too-much-for-college-blame-reagan/
- Sources of Financial Aid, May 2020, National Center for Education Statistics https://nces.ed.gov/programs/coe/indicator_cuc.asp#:~:text=(Last%20Updated%3A%20May%202020),%E2%80%9301%20(75%20percent)
- ‘Severely Derogatory’: U.S. student debt defaults have ‘grown stunningly’, August 13, 2019, Yahoo! Finance https://finance.yahoo.com/news/student-loans-debt-grow-193708816.html
- Racial Disparities In Home Appreciation, July 15, 2019, Center for American Progress https://www.americanprogress.org/issues/economy/reports/2019/07/15/469838/racial-disparities-home-appreciation/
- Student Loan Debt: 2020 Statistics and Outlook, December 7, 2020, Investopedia https://www.investopedia.com/student-loan-debt-2019-statistics-and-outlook-4772007
- Our Greedy Colleges, February 18, 1987, New York Times https://www.nytimes.com/1987/02/18/opinion/our-greedy-colleges.html
- Reagan Calls Student Loan Cuts ‘Reasonable and Just’, February 28, 1985, Los Angeles Times https://www.latimes.com/archives/la-xpm-1985-02-28-mn-12707-story.html
- My Students Pay Too Much for College. Blame Reagan, September 2, 2014, Washington Post https://www.washingtonpost.com/posteverything/wp/2014/09/02/my-students-pay-too-much-for-college-blame-reagan/
- California Institute of Technology, Jet Propulsion Laboratory https://www.jpl.nasa.gov/infographics/infographic.view.php?id=11358
- Time Magazine, How The Student Debt Complex Is Crushing The Next Generation of Americans, October 29, 2019 https://time.com/5712504/student-debt-complex-harms-america/