The cost of university is too great a burden for young people to bear
On average, a US graduate has student debt of about $37000. This is due to the cost of tertiary education being too much for many families and students then have to resort to taking out loans. In essence, the student bears the cost of their studies and this leaves them shackled with debt well into their adulthood.
University fees are quite high. When fees are in place in countries, many people find it extremely difficult to find the funds to pay for it, leading many people to seek school loans. In the United States, obtaining loans for university is the norm. These loans can put pressure on students to perform well, severely affecting student mental health as they adjust to life in university. The cost also has lasting ramifications for the students well into the future. Being indebted encourages individuals to take jobs for which they are not necessarily best suited in order to get started on debt repayment immediately after leaving higher education. Furthermore, repayment of loans can take many years, leaving individuals with debt worries for much of their working lives. This is because when students graduate with debt, they will likely continue to add to their debt with interest. As such, it can take many years before they manage to dig themselves out of debt that only seems to keep growing. In the meantime, this delays spending on such things as buying a house or a car. On the other hand, if people were to graduate without debt, that could fast track their ability to earn, save, and spend. Lastly, the threat of debt can cause students to avoid tertiary education entirely. But, if the debt wasn’t a reality, then the younger generation may feel more motivated to pursue tertiary education in the first place.
The argument is that there is an opportunity cost to taking out student loans because the money used in repaying can be utilised in other ways. However, opportunity cost exists in everything. The people who willingly take out these loans consider the education worth the cost. It is actually beneficial to society at large that university graduates begin their employment earlier due to debt since it makes them productive members of society more rapidly than they might have done. For example, in Ireland where higher education is free graduates often take a year or two to travel and “find themselves” while giving little or nothing back to the state that has financed their degrees. It is good that people begin contributing to the economic life of society after graduating from university, rather than spending their youth in unproductive pursuits. This also means that college teaches young adults the value of budgeting and being able to manage their finances well. Student loans are often the first major financial issues young adults grapple with. Having a clear plan to pay them off quickly proves you know how to budget your money, skills people use again and again when buying cars or houses. Having to pay for university also incentivises students to perform academically. If higher education becomes free, it might devalue a degree, leading to students cutting more classes or not trying as hard because they don’t have to pay for anything. The current price of college drives students to complete their schooling as quickly as possible so as to reduce debt. Without that financial drive, students may become lazier.