Student Debt is Killing Innovation
“Students who acquire large debts putting themselves through school are unlikely to think about changing society. When you trap people in a system of debt , they can’t afford the time to think”.– Noam Chomsky
Ashley Hardin is typical of people in the United States who have taken education loans since 2008. According to The New York Time, she pays more on her student loan each month than she does on rent. Her total loan amount was $150,000. Each month the Seattle-based waitress pays $1,395 to service loans she had incurred in her twenties.
And after eight years of payments, her loan balance dropped by only $1,000.
Unfortunately, she is part of a financial bubble that threatens an engine of American growth: innovation.
Graduates of colleges and other educational institutions in the United States owe $1.4 trillion on student loans.
Youth: A Piston of Innovation
A major source of innovation in the United States comes out of garages, bedrooms and cooperative workspaces. Young people take dreams they’ve had or observations they’ve made and work hard to capitalize on solutions to some of the most pressing problems of our time.
Times have changed, though. The American economy offers most student loan recipients low-paying service jobs. Most of those dreams of entrepreneurial glory remain within the cramped confines of the childhood bedrooms in which dreamers were raised. Many loan takers cannot even afford to rent a place of their own.
The weight of debt forces the brightest to take jobs that pay the bills, not change the world. The baby-boomer generation was out protesting social injustices in the late 1960s and early 1970s. Gen Xers in the 90s fiddled around in their garages and dorm rooms to create the Googles and Facebooks of the world. Millennials, meanwhile, are drawing lattes for caffeinated customers and lamenting the debts they accumulated for their college educations.
So until national policy develops incentives for individuals and institutions to draw down student debt in a matter of months — not decades — there are some things the indebted can do to manage their budgets more effectively through the use of technology.
Nowadays, artificial intelligence platforms enable individuals to join groups for big savings on items and services for prices unthinkable even a few years ago. Artificial intelligence and chatbots help people manage their tight budgets by tracking spending habits.
Something holders of student debt, innovators, and social entrepreneurs have in common is that they learn to operate on shoestring budgets. New technologies may help the indebted focus on what matters while taking care of their financial burden.