Will student loan debt be worth it? (San Francisco Chronicle Op-Ed by GPP student Amber Gonzales-Vargas)

In 2014, outstanding student loan debt for Millennials surpassed $1 trillion, making it the second largest category of household debt after mortgages.

By Amber Gonzalez

In 2014, outstanding student loan debt for Millennials surpassed $1 trillion, making it the second largest category of household debt after mortgages. These numbers are all too familiar to me and my friends at UC Berkeley. Initially, most of us considered student loans a great trade-off for getting our undergraduate degree, and we have held to that opinion as the loans needed to graduate increased. Yet as we face graduation, these loans are not feeling fair. They feel like a noose around our collective necks, the price of which may be dreams deferred.

As a low-income, first-generation student from Stockton, I have been able to stay enrolled at UC Berkeley through the rising tuition— from $9,342 in 2010-11 to $13,317 in 2014-15 for California residents— thanks to a Pell Grant and Cal Grant A. To cover other living and student costs such as rent, food and books I have worked as a peer adviser and office administrator.

Believe me, I am not complaining. My parents, who are from Peru, have often reminded me that I am lucky to have been born in the United States— and I agree. We assumed my future was set, as long as I excelled in high school and succeeded in college. This path would land me a job reserved for hard-working students from one of the nation’s best universities.

But will it? What is apparent to many of us attending four-year institutions is that a bachelor’s degree does not reserve you a job, even if you are graduating from a top institution. The proverbial entry-level position for recent graduates now typically requires two or more years of relevant work experience. In certain fields, these opportunities are offered as an unpaid internship, a luxury that few can afford to accept, even if it increases the chances of getting a job.

For me and many of my friends, the need for job security is especially high because we face immediate loan repayment. I owe $12,900. Yet I am “lucky.” I took out subsidized loans that do not accrue interest until six months after graduation. Others? My brother, who is at a private university, has taken out unsubsidized and other loans that begin to accrue interest upon signing, and he is only a freshman.

We are all fiercely hunting for a job. We know that not having work lined up this summer will make paying back our loans difficult. One of my best friends, who has accrued about $15,000 in debt, is attending community college as a way to acquire additional skills and to defer her loans for a few more months. She is doing this while working full-time.

Because our immediate futures are limited by loan paybacks, many Millennials may avoid creativity or risk. We may take any job that provides an income, however far from our interests. Down the line, this may also translate into deferment of such life milestones as buying a car, buying a house or having children.

In a March 28, 2014, article, Los Angeles Times columnist Chris Erskine said Millennials will be the greatest generation yet because they are idealistic, adaptive and more tolerant of differences. But Erskine makes no mention of student debt, citing instead a Pew Research Center study of Millennials that found we are the nation’s “most stubborn economic optimists,” with more than 8 in 10 reporting we have enough money to lead the lives they want, or expect to in the future. I wish he and the Pew pollsters had canvassed more of the 80 million Americans between the ages of 18 and 34 whose economic lives are dictated by student debt.

In March 2015, President Obama signed a Student Aid Bill of Rights that argues that the federal government should do more to help young people pay off their crushing loans. He offered several improvements such as a Pay-As-You-Earn plan and a centralized loan website. My experience is that no one really wants to take out a loan, and while this plan sounds like a good way to help young Americans navigate the student-loan system, we should be looking to significantly reduce student loan debt, not just making adjustments to help keep track of debt. Students still will face rising student-loan debt and have to start their careers increasingly indebted.

In the upcoming weeks, the class of 2015 will depart for the working world. We will go on to become teachers and doctors and policemen and data analysts. An estimated 12.7 percent of Californians will default on their debt; the rest will dutifully pay back the banks and the government. Our successors may also fare worse. The UC regents have approved a tuition increase of up to 5 percent per year through the 2019-20; however, the governor has proposed a budget deal that would give UC more funding if UC forgoes the increase and freezes tuition through 2016-17.

Will Americans with such early indebtedness be able to become credit-worthy adults? In a decade’s time, will our earliest financial decisions feel worth it? I certainly hope so.

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