The Student Debt Crisis Needs More Than Another Repayment Plan

Doreen Cruz, 43, was always determined to go to college. She grew up in poverty, she said, and always knew her family would not be able to afford higher education. Cruz took general education courses at a community college before transferring to a state university, where she took out student loans to finish her undergraduate education. She explains that she didn’t entirely understand the process or how the loans would work, and her loan servicer encouraged her to consolidate her loans. It wasn’t until after she graduated that they informed her that the six-month, post-graduation grace period, when borrowers don’t have to begin immediate repayment, had elapsed because of the consolidation.

From then on, Cruz felt stuck in the chaos of the student loan system: In 2015, she pursued a master’s degree at the urging of an employer who later decided not to promote her, and had income-driven repayment up until the payment pause in 2020. Though a couple years later she enrolled in the SAVE plan, she recently received notice that she was no longer eligible and was moved to a plan that increased her monthly payment from $159 to $625. Cruz, who joined the Debt Collective this summer, is  concerned she’s going to be pushed into an even more expensive plan.

“I’m not kidding you,” said Cruz, “I wake up every day panicked about this.”

Those who have borrowed owe more than $1.7 trillion in student loan debt, and the system itself is broken. Reporting from Business Insider described borrowers scrambling to navigate President Donald Trump’s overhaul of student loans, which included cancelling the SAVE (Saving on a Valuable Education) plan put in place by the Biden administration. Around one in five federal student loan borrowers are currently in default, according to reporting from PBS. Borrowers are the ones left to deal with the fallout of sweeping changes and skyrocketing payments. And student loan debt deepens economic, gender, and racial disparities, compounding the stress of debt repayment. A 2024 report from Protect Borrowers outlined how student debt contributes to the racial wealth gap, which forces “Black student loan borrowers to take on more student loan debt to access higher education,” disproportionately impacting Black women, the report says. Other reports detail how the gender pay gap and longer periods of student debt repayment make it challenging for women to access the economic benefits of higher education. Meanwhile, the cost of college still feels staggering.

“We are at a critical crossroads in our country where the actions of our policymakers are leaving an entire generation of Americans worse off than their parents’ generation, and student debt is a key factor in that reality,” Aissa Canchola Bañez, policy director at Protect Borrowers, told DAME via email.

While experts say there are solutions happening, like partial debt cancellation or place-based tuition-free college, there are also ways to think bigger about how to make undergraduate higher education more accessible and affordable for all.

More certainty around funding

Uncertainty around the cost of higher education is a major issue, according to experts. A 2026 report from the Lumina Foundation and Gallup outlined that though interest in pursuing higher education is still high, perceived access to quality, affordable higher education opportunities is declining.

There’s evidence of a causal relationship between states defunding public institutions and tuition increasing, said Dominique J. Baker, associate professor of education and public policy at the University of Delaware. While the narrative might be that that means less extravagant dorms or fewer lazy rivers, according to Baker, it means less funding for instructors or tutoring supports.

Baker often hears people say that college is too expensive, and the price has to be lowered. “The problem with that is a number of colleges have lowered the price,” she explained. The amount that students borrow on average has gone down since 2011 or 2012, and tuition price for public institutions has held steady or decreased, said Baker, speaking specifically about undergraduate loans. That hasn’t fixed the problem of it feeling too expensive for students.

A June 2026 web survey from Gallup and the Lumina Foundation, reported on by Inside Higher Ed, stated that, though there’s actually been a drop in tuition prices over the past several years, the majority of adults surveyed still believe four-year institutions aren’t affordable. According to the report, about three-quarters of parents still want their children to pursue some type of higher education following high school.

Certainty can play an important role in where students decide to enroll to begin with. As an example, Baker points to how Michigan used Education and Human Services data to determine what students would be likely to receive a full ride and be high-achieving students. It can change the number of low-income students enrolling. “That is what certainty gets you,” said Baker.When students feel certain that the financial aid will be there, it can fundamentally change where they choose to enroll.”

Before a student enrolls in college, it’s critical to create more certainty about aid that will be available—and have generous aid, Baker said. On the back end, after someone has graduated, there has to be more certainty around repayment.

According to Daniel Collier, associate professor of higher and adult education at the University of Memphis and research fellow at the Debt Collection Lab at Princeton University, uncertainty is a devastating factor right now due to limited trust in the federal government. There’s an influx of borrowers trying to settle issues with their loans at the same time the Trump administration is stripping down the Department of Education, he explained.

Ever-changing repayment programs, coupled with limited or untrustworthy information from the federal government, make it impossible for people to feel like they’re on steady ground. “Those burdens pile up on people,” Collier said, adding that such stressors relate to financial, psychological, and social distress“Those burdens relate to financial distress, and those burdens stop people from making quality decisions about their lives. It stops people from taking new jobs.”

Thinking of aid and affordability, one option, said Collier, is making things more “scholarship and grant heavy.” He pointed to the need to expand work-study programs, and ensuring that Pell grants have better purchasing power—there was a time where Pell covered the majority of tuition, room and board, and fees instead of just a portion. (In terms of free community college programs, he saw firsthand what policies like the Kalamazoo Promise or Tennessee Promise can do for students who engage in these programs, but said there doesn’t seem to be “much political will” to engage in that conversation.)

“It’s not like these individuals won’t return the investment one day. They’re going to get jobs on average that pay more than they otherwise would have had just in high school,” said Collier.

Purpose of college and expanding access

Current chaos surrounding student loans is happening amid ongoing attacks on higher education by the Trump administration, targeting everything from research funding to free speech and expression on campuses. That has sprawling ramifications.

“I think we have some folks in the country who have explicit authoritarian aims,” said Baker. The far-right uses return on investment as a metric when they want to, and dismiss it when they want to, while those focused on bipartisanship above all else seem “unable to make any sort of cultural arguments for why it might be a good thing to have higher education.”

Alex Lundrigan, policy manager for Higher Education and the Workforce at Young Invincibles, said that in some focus groups with younger adults who are entering higher education, many young people note they’re looking at outcomes. “We’re seeing that compounding effect of, now it’s not just a bachelor’s degree, it’s a master’s degree,” Lundrigan said. “If wages aren’t growing comparatively to the cost of education, it doesn’t matter if you get a master’s degree.”

What’s happening at the federal level is a “kind of knee jerk” reaction to supply and demand, he said, where the logic is to reduce the number of educated workers in order to increase the value of the degree, pointing to graduate loan limits as an example. “Reducing access isn’t the answer because research consistently shows that a higher postsecondary education leads to longer or higher lifelong earnings,” he explained.

Instead, he thinks of a “lifelong learning” model, where there’s more acknowledgement that students might pursue an associate’s degree or certificate, work for several years, and ultimately return for further education, or complete general education requirements at one institution and more specialized education or credentialing through another.

He points to credit articulation agreements, formal partnerships between institutions, like community colleges and four-year universities, that map out how credits transfer into specific degree programs. That intersects with work on the College Transparency Act, he said, bipartisan legislation Lundrigan said would create national data infrastructure to track student enrollment, credit accumulation, transfer success, and degree completion. “Expanding this data collection allows prospective students to examine a program’s real-world employment outcomes and gain a much deeper look at their potential career trajectory before committing to a program or taking on debt,” he said.

Braxton Brewington, press secretary for the Debt Collective, pointed out that there’s often a misunderstanding of “pay off.” For example, whether a degree will pay off financially doesn’t make sense for nurses or teachers, two historically underpaid professions. That doesn’t mean people should be discouraged from pursuing those careers, or boxed out of them. “We need teachers. We need nurses, which is why we should be funding those things,” he said.

Continued efforts for debt cancellation

In his work, Daniel Collier has been asking borrowers what changes they want to see: Many have pointed to simple solutions, like bringing back the SAVE program, or lower interest rates.

Many also discussed wanting bipartisan solutions for student loan policy, in the hope that such policies would remain more stable, he said. “Not all of the desired solutions lend themselves to bipartisan solutions right now—although surprisingly the low to no interest rates would be a fairly suitable populist idea. Yet, that would be counter to current wider culture war talking points relative to college and higher education,” he explained.

Multiple experts stressed the need for student debt cancellation, and according to Brewington, that isn’t divorced from a “college for all” conversation. There are wins where cancellation is happening in piecemeal ways, he said, but “where we really want to go is we need a “college for all bill,” in which the federal government fully funds college. He pointed out that there are already states, including New Mexico, offering free or very low-cost tuition.

And, he noted, college for all does not mean college is mandatory: “College is a pathway that people can opt into,” he explained. “And college is not divorced from trades.” Brewington explained that someone wanting to learn how to fix HVACs should have a fully funded system; so should someone learning to be a doctor.

In the immediate term, the Debt Collective is advocating for a payment pause: the affordability crisis is crashing up against massive errors happening in the student loan space. “Fundamental parts of student loans do not work,” he said.

Reporting from the Associated Press on the number of borrowers with defaulted student loans noted that some people are so “overwhelmed” by the changes to the student loan system, they’ve stopped paying.

According to Aissa Canchola Bañez, part of the solution has to be holding those who profit from student loan debt accountable. “At the end of the day, Republican attorneys general acting on behalf of student loan servicers—the private companies that make millions each year to keep Americans crushed by student loan debt—were at heart of the legal challenges before the Supreme Court that blocked millions of Americans from getting student loan debt relief,” she said.

At Protect Borrowers, which also works toward free college and debt relief, they’re hearing from borrowers who are receiving misinformation or false notices from student loan servicers, or are being given incorrect payment information. “We simply cannot allow these private companies to continue to fail to do their jobs and protect their bottom line at the expense of student loan borrowers,” she said.

For Doreen Cruz’s part, even though she feels like she’s in a better position than a lot of people, she feels that the system has “changed things on us so much over the years,” making debt much harder to pay off. Even if student debt can’t be forgiven, Cruz thinks there are things that would help, including payment schedules and better interest rates. “I’m not trying to get a handout here at all. I will pay my fair share, but I need to know what that is,” she said. She thinks a lot of people feel that way.

When asked what debt cancellation would mean in her life, she described it as “such a huge relief.” “Like a huge pile of bricks off my shoulders,” she said.