Is a college education still a worthwhile investment when it means taking on decades of debt? A growing portion of young Americans believe the benefits of their degrees don’t justify the price. With the Supreme Court blocking the Biden administration’s attempt to ease the burden of that debt, the situation is putting pressure on universities and dividing the political field.

University of Ljubljana, summer 2015. A man is talking to students in the middle of the campus: “In the United States, young people are accumulating debts of tens of thousands of dollars, sometimes even more than $100,000 per student.” The Slovenian students are surprised. One of them exclaims: “This is crazy!”

In the documentary Where to Invade Next (2016), American filmmaker Michael Moore explains to his compatriots that student debt is not inevitable and that in most European countries, education is largely funded by the state. In Slovenia, Moore meets young people who do not even know the concept of student debt and struggle to understand why education is so expensive in the United States.

While Americans may be unaware of the free education in Europe, young Europeans are often unaware of the magnitude of student debt in the United States. Free education in France contrasts sharply with the American system, where education is seen as an individual investment rather than a right. Debt creates significant stress for young American graduates, who begin their careers with long-term loan repayments, representing a major economic challenge for individual students and for the country as a whole.

Student debt is also a major concern for American university leaders, especially as the start of the school year is marked by a complex economic, social and political context. While the previous academic year was punctuated by student mobilizations and tensions on several campuses leading to the resignations of presidents , the issue of indebtedness continues to affect access to higher education and the daily lives of students, constituting a central issue for the future of academic institutions in the United States.

Student debt, a priority issue for Americans

As of June 2024, U.S. student debt stood at about $1.7 trillion, a 42% increase in a decade, according to the Pew Research Center . A quarter of adults under 40 carry this debt, compared to just 4% of those over 50. The median debt for a bachelor’s degree borrower is about $25,000, but for one in four graduates, it exceeds $100,000.

The student debt crisis in the United States is growing, with approximately 43 million Americans affected . Rising tuition rates have pushed students to borrow more, pushing total debt to record levels. This issue, far from being marginal, is making its way into all economic and political debates, especially as the 2024 elections approach. More than 60% of Americans consider this issue a priority, and a majority support measures to cancel student debt .

The Biden administration has attempted to ease the debt burden through the Saving on a Valuable Education (SAVE) program, launched in September 2023. The plan sought to make repayments more affordable and allow for partial debt cancellation under certain conditions.

However, in August 2024, an appeals court blocked the initiative , raising constitutional questions about the executive branch’s power to act without congressional approval. The blockage reflects the difficulties Democrats face in delivering on campaign promises as student debt remains a major issue.

Decades of attempts to write off debt

Attempts to forgive student debt in the United States go back decades, with conflicting reforms and political resistance. Under President Clinton in the 1990s, the Direct Loan program allowed students to borrow directly from the federal government, which dramatically increased the volume of loans, but few options existed for canceling them.

It was the Bush administration that, in the early 2000s, put in place a few debt cancellation programs, including the Public Service Loan Forgiveness (PSLF) in 2007. This program promised debt cancellation after 10 years for public sector employees, but its strict criteria limited access for many borrowers.

Under President Obama (2009-2017), significant steps were taken to alleviate student debt. In 2010, bank-backed loans were replaced with direct loans, which came with lower interest rates. The Income-Based Repayment (IBR) program was expanded to adjust payments based on income, and in 2014, the period required for debt cancellation was reduced from 25 to 20 years. The Pay as You Earn (PAYE) program, launched in 2012, also made repayment easier for many.

During Trump’s presidency (2017-2021) no major reforms were implemented. The debt continued to grow, reaching around $1,500 million in 2020.

Upon taking office in 2021, Joe Biden made student debt reform a priority, temporarily suspending repayments due to the COVID-19 pandemic and promising to cancel up to $20,000 of debt per borrower. However, the initiative has faced strong political and judicial opposition. In June 2023, the Supreme Court blocked his cancellation plan , arguing that such measures require congressional approval. The appellate court’s decision last August therefore only confirms the constitutional limits of executive power in this case.

The outcome of this crisis will therefore depend on a legislative compromise in a context of political polarization.

College, an inaccessible luxury for a growing portion of American youth

Student debt has major economic implications , restricting young people’s ability to consume and invest. Many graduates spend a significant portion of their income on loan repayments, hampering economic growth and social mobility. In a context of moderate growth and high inflation, purchasing power becomes central to American voters, who see college as an unaffordable luxury.

By 2023, one in three recent graduates felt that the cost of their degree did not justify the benefits, which may explain the growing disaffection of young Americans for higher education. Moreover, the dropout rate during the first two years of study is only increasing, particularly for low-income and minorities.

This situation creates new financial uncertainties for universities, especially smaller institutions, already facing post-Covid-19 enrollment declines, inflation, and rising operating costs. According to a 2023 Deloitte report , many institutions are looking to diversify their revenue streams through private sector partnerships and online programs. This transformation aims to reduce their reliance on tuition fees, while also posing ethical dilemmas about their financial autonomy.

To cope with budgetary pressure, many universities are relaxing their admissions criteria, becoming less selective. According to the neoliberal think tank American Enterprise Institute , the acceptance rate reached 66% in 2023, compared to 57% in 2021. At the same time, about 1,900 institutions have abandoned the SAT/ACT standardized tests , thus facilitating access to higher education.

However, this openness does not improve the admissions chances of ethnic minority groups, particularly black Americans and Latinos, who also suffer higher levels of debt. African-American students, for example, borrow an average of $33,960, the highest amount among different ethnic groups .

Faced with declining enrollment of American students, many universities are turning to international applicants, particularly in STEM fields . This increasing reliance, primarily at the master’s and doctoral levels, raises questions about the sustainability of institutions’ business models. By focusing on international students to compensate for the loss of domestic students, universities risk neglecting their mission of inclusive education, thereby compromising their diversity and social responsibility, not to mention considerations of scientific and geopolitical dependency.

Author Bio: Alessia Lefebure is a Sociologist, member of the UMR Arènes (CNRS, EHESP) at the School of Advanced Studies in Public Health (EHESP)