‘I’m Going to Die with a Student Loan’: What Should the Government Do About the Trillion-Dollar Debt Crisis?

Ken Hillstrom recently got engaged. A 31-year-old teacher, he sprang the sweet surprise on his girlfriend of three years, Gretchen Egan, as they hiked in Acadia National Park, a place made special during their time together as summer camp counselors. With a family heirloom ring passed down by his future father-in-law, Hillstrom popped the question to a thrilled Egan, a 26-year-old school nurse, who managed a joyous nod of agreement.

It was a moment to savor: the start of a shared life — and shared burdens. Long before that day, when the two first talked about tying the knot, Ken had something he knew he had to confess.

“If we get married,” he told Egan, “you’re marrying my debt, too.”

As a teen, Hillstrom left his hometown of Trenton, Georgia (population: 2,150). It’s a place, he says, of few opportunities. But his parents couldn’t afford to help him leave. “My options were to stay in my small hometown or go to college and take out student loans,” he tells PEOPLE. “I wanted an education. It was the better option, but I wish there were more.”

A dozen years later, Hillstrom has two degrees to his name — a Bachelor of Science in outdoor education from Georgia College and a master’s in special education from Curry College — and $80,000 in debt.

What’s holding Hillstrom back is the very thing he needed to get ahead: his student loans.

“It’s a huge obstacle in moving forward with my life,” he says. “We can barely afford a dog.”

He’s not the only one. Some 44 million people in the United States are similarly saddled with student loan debt, owing nearly $1.5 trillion. Last fall, Education Secretary Betsy DeVos called it “a crisis.” More and more students leave school each year with loans, experts say, and students borrow more than $100 billion every year to attend college or graduate school.

Borrowers owe the federal government an average of $37,172. A quarter of the borrowers owe more than $50,000, and the Department of Education, which is responsible for the vast majority of all student loans in the country, says a few dozen borrowers have graduate debt of $1 million or more.

The reason: The price of higher education has soared since the ’80s, doubling and then doubling again.

For example, 20 years ago the average tuition cost for four years of public college was just over $20,000. Ten years ago, it was roughly $30,000. Now? It’s $41,000. Add room and board, books and various fees and the expenses could double. While most students attend public college, four years of tuition, room and board at the most expensive private colleges tops $280,000.

After his undergraduate studies, Hillstrom spent a few years working at a boarding school in South Korea that paid for his place to stay, allowing him to pay down some of his student loans at roughly $600 a month. Upon his return and enrollment in his master’s program, in Milton, Massachusetts, for which he took out another $25,000, Hillstrom worked full time but deferred his loan payments. Still, the interest on most of his loans kept growing and growing.

Looking back at the choices he made and the money he borrowed to leave Trenton, he says, “I didn’t know about community college — it would have been far cheaper. We weren’t given enough guidance.”

Hillstrom is about to begin work as a special education teacher with a $52,000 salary — the most he’s ever earned. But starting in November, he’ll have to pay more than $1,000 a month back toward his debt.

“A lot of my income is going to go straight back to the loans,” he says.

Luckily, Egan has no student debt of her own. The couple, who are planning to marry next September, live in a two-bedroom, 1,200-square-foot apartment with another couple.

“I’ve entered a new phase of my life,” Hillstrom says. “I’d like to maybe start of family, maybe buy a house.”

He can go online and look at his balance — how it will inch down, month-by month, for years to come — and it’s hard to imagine fully paying back his loan and the growing interest on top of that, at which he slowly chips away.

“I’m about to be 32, and I still have so much money to pay off,” he says. “I thought I’d have the American dream by now.”

The 2020 presidential election has put a national spotlight on the issue, as leading contenders offer solutions to help those struggling to repay their student loans, up to and including total debt forgiveness — which could mean thousands of dollars of debt or more, per person, erased by the federal government. Some politicians have proposed more systematic changes, such as free public college, removing the need for loans entirely.

“It is time to end the absurdity of sentencing an entire generation … to a lifetime of debt for the ‘crime’ of doing the right thing: getting a college education,” Sen. Bernie Sanders, an advocate of free college, wrote in Fortune in February.

Indiana Mayor Pete Buttigieg, at 37 the youngest in the field of 2020 candidates, has said that he and his husband, a teacher, personally understand the weight of these loans. “Chasten and I have six-figure student debt,” he tells campaign crowds.

Sanders, a independent from Vermont, helped push the proposal for tuition-free school and student loan forgiveness into the mainstream. Sen. Elizabeth Warren, who like Buttigieg and Sanders is among the top group of presidential contenders, has also been working on this problem for years. She created the federal Consumer Financial Protection Bureau in 2010 to help borrowers.

In April, when unveiling her own plan to address the trillion-dollar student loan debt, Warren described it as a national economic burden “crushing millions of families and acting as an anchor on our economy.” In July, she wrote that the mounting debt was increasing the risk of an economic crash.

The Fine Print on Student Loans

As higher education has become more expensive, the federal government has stood ready to match student need.

The Department of Education offers loans from $5,500 to $12,500 per year for undergraduates, regardless of credit history or ability to pay, and the government sets the interest rate. The caps for graduate school are even higher and, for students with satisfactory credit, they can borrow up to the full cost of their education.

Once a loan is taken, the rate on that loan never changes, so students often have multiple loans with varying interest rates. Interest accrues even while the borrower is still in school, unless they have a subsidized loan, available only to those with financial need.

What’s more, even if a student never graduates, they are still responsible for their loan and it won’t be forgiven even in bankruptcy. About 11 percent of the federal student debt was in delinquency or default by the end of last year, but most borrowers never default and instead live with debt they are incrementally paying off.

“I don’t understand how the government expects anyone to get ahead with all that debt over their head,” 38-year-old Mary Sheppard of Teaneck, New Jersey, tells PEOPLE. “I know I’m not alone.”

Sheppard owes $106,000 in student loan debt for an undergraduate degree in sports management, which didn’t lead to a job in the field, and an MBA that allowed her to earn $70,000 a year in bank marketing. Her husband is a preschool teacher who earns $55,000 for a 10-month job and works as a driver in the off months. At 5 percent interest, Sheppard’s consolidated monthly payment is $438 — adding roughly a third of their mortgage payment to their monthly expenses.

She tries to stay on top of her finances, but it’s not easy. When she was out on maternity leave with each of her two daughters, the bank offered eight weeks paid leave. She took an additional month and deferred loan payments during maternity leave — but the interest kept accruing.

“You never get above it,” Sheppard says. “You just hold on to it and pay it. It’s a struggle every month. But we make it. We figure it out. There’s always, ‘Who do we pay first? What can wait until next month?’ ”

That’s life for Nicole Hart as well.

Hart, 40, works in child protective services for the state of New Jersey. She drives 60 miles to and from work every day in a sometimes failing 2001 Honda Accord she named Goldie. “There’s no public transportation to where I have to go and it would be an expensive cab ride,” she says. “I have to constantly get something done — new brakes, replace the engine. It’s either that or get a new car, which means car payments. I’m weary of getting a new car because I’ll have the car note on top of my other bills.”

She bought Goldie used, and she took out a loan. Her payment was high, she says, because she’d missed two payments on her student loans. “When I was younger, I didn’t pay attention. I didn’t realize what a credit score was.”

Today her car is paid off, but her student debt lingers. Hart makes $75,000 a year, including income from a second job and overtime. She pays $450 a month on the $60,000 in loans she owes for her undergraduate degree in sociology and her master’s in social work. During the time she was in graduate school, she deferred her loan payments. And the interest grew ever-larger on top of that. As an investigator for child abuse and neglect, she may qualify for some loan forgiveness in 10 years. But every time she defers a month, the possibility of that forgiveness moves forward a month as well.

Hillstrom, the special education teacher, questions the wisdom of teens and young adults taking on so much debt.

“There’s no frame of reference,” he says. “You don’t know what interest rates are, you’ve not had to manage money.” But he understands the seductive logic of the deal: “I don’t have to pay this off until I’m out of college.”

‘We Have Tough Conversations’

Millions of students do take that deal every year, and then many of them end up at American Financial Solutions, a nonprofit that helps borrowers in trouble. The phone rings 30 to 40 times a day there. Often the callers are crying about student loans.

“It’s a big debt, and sometimes the best that we can do is help them keep their credit in good order,” says Becky House, the education director. She says graduates often have trouble finding a job that pays enough to afford their monthly payments. Even if they switch to income-driven repayment plans, the smaller payments don’t always cover the interest that is accruing and the debt keeps growing.

“They will never be able to pay it all off,” she says. “You look at buying a car or a house, and you can’t afford to buy what you want to purchase.”

Some of the most frustrated callers are parents who took out loans for their children’s education. Now facing retirement, they are weighed down at the exact moment when their income is freezing. “I have a $1,100 bill that I have to pay every month — how am I going to do that in retirement?” they ask. “We have tough conversations,” House says. One debt counsellor helped a 63-year-old woman write a résumé. Others are encouraged to ask their children to help make the payments, but many are reluctant, seeing it as a reversal of their promise to send their kids to college.

House advises people only to borrow what they truly need, not necessarily the full amount offered. But she knows that’s easier to advise than to do. Getting a government loan can be easy and quick — it can even be done by smartphone — and borrowers may not be aware of what they are signing. “There’s a lot of verbiage in there,” House says. “Better that one-pager like the mortgage industry. Then maybe people will think twice.”

“It scares me, honestly,” she says. “We see so much of the back end of how difficult it is to manage that debt.”

The underlying tuition hikes were more understandable when states were slashing higher education budgets after the economic downturn in 2008, but over the last five years state spending on higher education actually rose by 18.3 percent, or $14 billion, says Dr. James P. Toscano, president of Partners for College Affordability and Public Trust.

While overall state support is still not up to where it once was — with one October analysis finding “state funding for public two- and four-year colleges in the school year ending in 2018 was more than $7 billion below its 2008 level” — it’s a positive trend. Furthermore, students’ share of tuition, which grew rapidly after the financial crisis, may finally be leveling, according to the State Higher Education Executive Officers Association.

But the rebounding spending levels have not driven prices back down at every school. In some cases, Toscano describes a kind of amenities arms race by colleges, with students footing the bill whether they want to or not.

“What we haven’t seen enough is corresponding restraint when it comes to spending,” he says. “Whether we’re talking about Uber parking or rock climbing walls, such features contribute to rising prices. The trend of building lazy rivers — that’s not common but it does happen. A lot of the tuition is paid for by federal financial aid, there is not a lot of incentive to hold costs down, and trustees are rubber stamps for spending proposals. Isn’t there anyone to say students can’t afford a penny more? There are not enough of those voices in higher education.”

Terry Hartle, spokesman for and senior vice president at the American Council on Education, a national lobbying group for colleges and universities, disputes Toscano’s view of the tuition increases.

“The long term trends are unambiguous — state governments have cut funding on higher education for a generation in favor of letting tuition go up,” Hartle says. “Partly states are thinking that the beneficiaries of a college education (students) ought to be willing to pay more because they will reap the financial awards of going to college. And there can be no doubt that the economic returns of a college education continue to increase far faster than the returns to a high school diploma — even after all the tuition increases.”

“Because it’s a valuable good, many families will do what it takes … to get it,” he acknowledges. “It’s a vicious cycle.”

Toscano lobbied the Virginia legislature and won a tuition freeze for the coming school year, which will make it the first time in 17 years that tuition won’t rise. He says that’s $50 million Virginia students won’t owe. Pennsylvania is also freezing public school tuition.

University boards make tuition decisions, and Toscano advocates for the right of students to comment before any vote to hike tuition in the future, so board members know the real consequences of raising prices. Ten states now allow it, but Toscano would like to see it in all 50.

Several states are already offering tuition-free community college, technical school and bachelor’s degrees for in-state students, with some stipulations. Students in New York whose household income is less than $125,000, for example, can now earn a two-year or four-year degree at a public university, though they must promise to stay in New York for the same amount of time they received a scholarship.

Meanwhile, the Department of Education is rolling out new online tools for borrowers so they can clearly see the total amount owed and see forecasted repayment options based on the size of the loans.

Speaking bluntly, Hartle offers another solution for students: Choose a less expensive school.

“Nobody is forced to go to a particular college — if one is too expensive, go somewhere else. If one has lousy facilities — or too elaborate facilities — look elsewhere. If you think one school pays its football coach too much, go somewhere where they don’t play football,” he says. “There is a lot of choice.”

Sens. Sanders and Warren have proposed sweeping debt forgiveness programs that would affect millions of Americans, with the major difference being scale. (Sanders would erase all student debt, But Warren’s plan would cancel up to $50,000 in debt for Americans whose households earn less than $100,000 a year, and less for those making up to $250,000.)

Mayor Buttigieg calls for expanding the national service program that would allow students to earn debt relief, and he wants to make public college free for lower- and middle-income families so they won’t need to borrow such a hefty sum.

Sen. Kamala Harris, another leading Democratic 2020 contender, this week announced her own plan in which low-income students who received Pell grants from the government would have up to $20,000 of their loan debt canceled if they opened and ran a business in a low-income community for three years.

Harris and other candidates are also calling for an increase in need-based federal grants and support for Historically Black Colleges and Universities, as well as allowing all students to refinance their loans at lower interest rates.

Even the White House has weighed in: President Donald Trump’s 2020 budget proposal — essentially a signal of his priorities and positions — dropped the public service loan forgiveness program but called for a 12.5 percent cap on monthly payments and full forgiveness after 15 years of repayment for undergraduate loans and 30 years for graduate school loans.

Debt forgiveness has its naysayers, who argue that taxpayers should not be left with the tab for a specific student’s decision to borrow. “[It] punishes those who did the right thing,” Michael Solon, a former Republican Senate aide, wrote in The Wall Street Journal in June.

Almost 100 million Americans didn’t go to college, and more than 100 million people went to college but didn’t take loans or already made sacrifices to pay them off.

Other debt forgiveness skeptics say such expansive remedies exaggerate the situation and that many borrowers go on just fine with their loans, with solutions already available for those who are truly struggling.

“Of course I would like to see my student loan debt erased,” says Sheppard, the bank marketer, but she doesn’t see that as realistic. She tells PEOPLE she was the first one in her family to go to college and loans were the only way she could afford it.

She supports the existing income-based repayment plans, in which “what you pay back [is] proportional to what you make.” And she thinks there should be some way for the government to subsidize loan repayment to “help people manage their lives better.”

As far as tuition-free college, she says, “It’s given some people a leg up in this world, so I’m for free education.”

‘I Don’t Know How We Do It, but We Do’

The debate and proposed changes to the system — to costs, to the loans to pay them — may help future students, but they don’t do anything right now for the millions of adults living with chronic student debt.

Aside from her own debt load, Sheppard and her husband have taken on more than $20,000 in additional student loans for half of her stepson’s college education, though they will defer payments for two years. A second stepson is starting at community college, testing the water to see if it is right for him, so he will not be adding more debt to the family household. One daughter is in public elementary school, and the youngest is wait-listed for free public pre-K, which will be a relief because the family is currently paying more than $1,000 a month for preschool and aftercare.

“I don’t know how we do it, but we do,” Sheppard says. “The luxuries that we should have, we don’t have. We do things locally and we entertain at our house. There’s no, ‘I want to go to the concert.’ There’s no that. I don’t go into the mall and say, ‘Hey, I like those sneakers.’ I don’t buy them. I don’t have disposable income like that. My children need clothes, they need shoes.”

Hillstrom eventually may be able to take advantage of $20,000 in loan forgiveness. Even then, he’ll pay around $21,000 more in interest than he borrowed in the first place, and that’s if he pays it all back within 10 years. If it turns out he can’t get any portion of his debt erased — and the Trump administration is being sued by teachers for denying erasure, while the government says it is making improvements — he will pay close to $30,000 in interest. If it takes him longer to pay off the loans, the total interest and the cost of his education will keep climbing.

Hart, for one, isn’t letting her loans limit her life.

“I’m single — it’s me paying everything, nothing is getting split,” says the child abuse investigator.

She was the first one in her family to graduate from a four-year college, which was the dying wish of her uncle who raised her after her mother died when she was 9, and she went on to earn a graduate degree. “I did it!” she says, “with $60,000 in loans I have to repay now.”

To buy a home this year in Newark, New Jersey, Hart deferred her student loan payments for two months. Now she owes a mortgage payment of $1,100 a month on top of her student loan. “I still want to enjoy myself. I don’t want to work just to pay my bills,” she says. “Four years ago I went to Greece, and next year I’m going to Africa. I’ll defer again.”

Her master’s degree is not a requirement for her position, but she’s glad she has it in case she ever has to look for a new job. She’s resigned to the seemingly endless obligation of her debt.

“I’m going to die with a student loan,” she says. “I’ve accepted it.”