A student loan is, ostensibly, a financial device utilized to enable aspiring professionals to attend institutions of higher education, even when they lack the funds necessary to pay for their tuition and fees. In reality, student loans are a mechanism for modern day indentured servitude, as thousands of indebted students graduate into a marketplace that is either unable to employ them, or is only able to under-employ them.
The end result is that students are becoming slaves to debt that they cannot discharge in bankruptcy and that will cripple them until the day they die. They will spend their days toiling in coffee shops for minimum wage while going home every day to sleep in their parents' basement, living off of cheap fast food and driving used Honda Civics with hundreds of thousands of miles on the odometer.
The Olden Days
Way, way back in the olden days — oh, say, 30 years ago — there were no student loans. If a person wanted to go to college after high school, that person had two choices: (1) obtain the funds from family or via a traditional loan; or (2) go to college part-time while working a job simultaneously, adopting a "pay-as-you-go" approach. Both strategies were feasible through the 1970s, before the price of a college education became as much as the cost of an aircraft carrier. Then, by the late 1980s, things changed and suddenly student loans were the only way a young person could hope to attend college. The reason for this is explained below.
Rise of the Student Loan
In the 1980s, lenders got smart. They realized two things: first, that young people are naive and easily taken advantage of; and second, that banks have the lobbying power to push whatever kind of legislation they want through Congress, no matter how draconian. Recent high school graduates are drawn to college like moths to a flame — they have been told their entire lives that a college education is the only way to avoid scouring kitchens for a living, and being gullible and inexperienced, they believe it. They are not told of the many innovators who become rich without first obtaining a college degree (like Bill Gates, Steve Zuckerberg, Steve Jobs, Tiger Woods, Harrison Ford, or Lady Gaga). Instead, they are sold on the bullshit idea that mountains of debt for a college degree are the only path to success.
So, the banks got together and lobbied Congress to make student loans virtually bankruptcy-proof; no more could a college graduate on hard times discharge his or her millions of dollars of debt incurred all for the benefit of a degree in the culinary arts. It was a great deal for the banks, and students lined up for the loans, being 17- and 18-year-old dumbshits who didn't know any better. Then, universities realized they could keep hiking up tuition faster than the rate of inflation because students who couldn't afford tuition would just take out predatory loans to pay the increased cost. And voila! The current student-loan-factory-Uncle-Tom's-Cabin-White-Slavery system was born!
Student loans today
Now, in the 2010s, we have entered an era where a college education costs more than a yacht, but has the value of a GED. Please. Students are virtually promised by college admissions directors that they will be earning more than $50,000 per year as new college graduates, only to find out that their diplomas are an invitation to work at Taco Bell for minimum wage. In the meantime, the students have incurred so much debt that it would take several lifetimes to pay it back, even on a fair repayment schedule.
Because the banks have all the lobbying power and the money, and because teenagers will remain gullible and inexperienced, it is likely that student loans will continue to be with us for a very long time.