The COVID-19 has brought an unexpected economic impact affecting many American families by putting them out of work. This has made it extremely difficult for some families to even pay for college as the average cost to attend a college or a university has been at an all-time high. As of now the estimated total student loan debt in America totals 1.6 trillion dollars. The figure is just insane and reflects how poorly the system has helped loan payers. Loan servicers do not care about the families that they give their loans out to, and in fact have taken advantage of the system with no one to keep them in check. The government needs to step in and take action to defeat this crisis and should implement some policies so that loan servicers are not taking advantage of students.

Students don’t truly understand how their student loan debts are going to affect them after they get out of college. That is why loan servicers are able to take advantage of them while they are. in college and not planning for their financial future as much as they should be doing. These loan servicers are detrimental to the student borrower’s finances because as they get behind on their payments, they will have to pay more interest, it is a continuous cycle that hurts the student. In the long run, loans have been ruining this generation as it is causing them to delay plans on retirement, purchasing a home or even starting a family.

The cause of the student loan debt crisis is mechanical as the Department of Education is not regulating its loan servicers enough. Loan servicers have not implemented any system to help their customers when they are failing to pay their loans. While it is easy to place all of the blame on the loan servicers, everything they are doing is legal. But it’s the Department of Education that has given them all of the power without checking into what they are actually doing to the borrowers.

Therefore, I am suggesting a system change within the Department of Education and their connection to Loan servicers. The DOE needs to take this student loan into their own hands and stop outsourcing it to these loan servicers so that they can make a profit. Paying for higher education is already difficult as it is for most Americans, but when u add the interest accumulated from loan servicers it makes it next to impossible to pay back without ruining your other future financial plans in your life. While creating a new way to implement these loans can be disruptive for the Department of. Education and their borrowers, I think in the long term it will help the borrowers and bring down the national student loan debt.