Can Coronavirus Be An Opportunity For Student Loan Reform?

These days, it doesn’t get the same attention that other major issues facing our country get, but the student loan debt crisis in the United States has become too serious of a problem to continue ignoring. Each year, LendEDU publishes its Student Loan Debt by School by State Report, an in-depth analysis of student loan debt figures at nearly 500 colleges and universities in the U.S.

A couple of weeks ago, LendEDU’s fifth annual student loan debt report was published based on the latest data from Peterson’s, and the trends were not exactly inspiring. For the Class of 2019, the average student loan debt per borrower figure was a sizable $29,076. This nationwide figure was an increase from the $28,565 that borrowers from the Class of 2018 owed. 

More than half of all the graduates from 2019—54.75% to be precise—left campus with their diploma and at least some amount of student loan debt. 


On a state-by-state basis, LendEDU found the debt per borrower figures for the Class of 2019 climbed as high as $38,521 in Pennsylvania, $41,511 in New Hampshire, and $41,579 in Connecticut. Some states have done a much better job at mitigating student loan debt, like Utah ($16,633), New Mexico ($20,497), and Nevada ($22,418). 

And on a school level, the student loan debt per borrower figures for the aforementioned graduating class looked even worse. Some of the highest numbers belonged to the New York School of Interior Design ($65,401), MCPHS University ($58,012), and Immaculata University ($55,126).

On the other end of the spectrum, higher education institutions in the LendEDU report like Texas A&M International University ($3,477), California State University, Chico ($5,894), and Western Oregon University ($6,815) were the limited bright spots in terms of managing student debt on campus.


LendEDU also recently published a separate report, this one on student loan default rates in the U.S., and found that the national student loan default rate is 9.70% but jumps to 14.70% at for-profit schools, 19.73% at Native American Colleges, 16.65% at HBCUs, and above 15% in states like Mississippi and Oklahoma.

While we’re at it, the outstanding national student loan debt balance currently sits at $1.67 trillion, which makes student loan debt the second largest class of consumer debt behind only that from mortgages.

In summation, the country most certainly faces a student loan debt crisis, although some may refrain from using that term. The ever-growing problem has been ignored for far too long and it’s time to start getting creative with potential solutions if we are to ever fix it.

And in the wake of the coronavirus pandemic, the U.S. federal government can implement those types of solutions.


First, the U.S. should award federal funding to states that develop the best permanent online education platforms to be used at their respective state public colleges and universities. As a result of the coronavirus pandemic shutting down college campuses, students had no other choice but to complete their Spring 2020 semester in a virtual setting. Interestingly enough, some students are now open to—or even prefer—the idea of attaining a bachelor’s degree online when it wouldn’t have even crossed their minds before the pandemic.

States should capitalize on this unique opportunity by creating first-class online education systems for their public institutions so that students will forever have the option of selecting this route as opposed to the traditional college experience. This would lower student loan debt because the virtual college option would be far more affordable compared to the in-person option, so students would no longer need to rely on both federal and private student loans to finance their degree.

The federal government can assist with this proposal by dangling federal funding for grants and research at state higher education institutions to entice states to create a virtual learning program and eventually awarding that funding to the states that take action and create state-of-the-art programs. 


Second, the federal government should also award similar federal funding for grants and research at state-based public colleges and universities to those states that offer their public college students a partial-pandemic tuition reimbursement. When students completed their virtual Spring Semester, they in no way, shape, or form received the higher education experience they had paid for and taken on more student loan debt for.

By providing their public college and university students with a pandemic reimbursement that pays back part of their tuition from the Spring 2020 semester, states can lower their student loan debt because students can use the money to either payback student loan debt from previous semesters or pay tuition for forthcoming semesters.

Where the federal government can aid the process is by once again awarding federal funding for grants and research at the public colleges and universities in states that implement a partial-pandemic tuition reimbursement program at their public institutions.

Mike Brown of LendEDU. Courtesy photo


Third, the U.S. government should implement a first responders student loan forgiveness program as a final pandemic-based solution aimed at lowering the nation’s student loan debt. For their brave response to the coronavirus pandemic, we owe our first responders a debt of gratitude, and a federal-based student loan forgiveness program is a great way to start. 

Any nurse, paramedic, firefighter, or law enforcement officer that graduated college over the last five years and has served in their position for at least three years before heading into the fight against the coronavirus pandemic should have all federal student loan debts forgiven. One final requirement for these borrowers would be that they have demonstrated a history of successful student loan repayment without ever before defaulting on any federal student loans. 

Fixing this country’s student loan debt almost seems like an impossible task but we must try at the very least to do so or we will suffer the macro-economic repercussions moving forward. In response to the coronavirus pandemic, there are potential solutions that could all help reverse our student loan debt woes.

Author Bio: In his role as Director of Communications at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work for LendEDU, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.

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