“How Do Federal Student Loans Affect the National Debt?” Peter G. Peterson Foundation, 17 May 2022, https://www.pgpf.org/blog/2022/06/how-do-federal-student-loans-affect-the-national-debt.
Direct Quote: Did you know that the federal government is the direct lender for nearly all student loans in the U.S., lending trillions of dollars to millions of borrowers to help increase access to higher education? Because the amount of funding for new student loans exceeds the amount of repayments from existing loans, the government must borrow the difference, which adds to the national debt.
Summary/My Interpretation: One of the most important federal programs is the low interest loans that the government is able to provide in order to encourage education. As the national debt continues to rise, this program gets placed in jeopardy. Specifically, since the US must take loans to cover the difference between loans paid back and loans given, it contributes to the deficit. This is problematic because if the debt continues to balloon, it may cause the government to place higher interest rates on these loans, leading to less accessible education.
How I Plan to Use This in My Project: This article introduced me to the concept of the national debt crowding out federal student loan programs. I want to continue exploring this issue as there exists a direct link between the federal debt and the accessibility of education in the US. This impact would also spill into other sectors as education is often associated with economic growth and stability.
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