The Soviet Union is to blame for the student debt of Americans: how Moscow's space program changed education in the United States

On October 4, 1957, the Soviet Union launched the first satellite into low-Earth orbit. To President Dwight Eisenhower, this was a clear sign that the United States needed more scientists and engineers to compete with other countries. But there was one problem - the education system at that time was exclusive and did not allow people with low and middle incomes to study. The publication told in more detail Business Insider.

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America would not have caught up with the Soviet Union in the "space race" as long as the situation was like this.

Congress stepped in and created the National Defense Education Act (NDEA) at the request of Eisenhower, which allowed the government to provide student loans in science and mathematics. Later, it was amended to remove restrictions on areas of study.

In other words, the satellite has spurred the creation of a federal student loan program. This is detailed in his book The Debt Trap by Wall Street Journal reporter Josh Mitchell.

“It is no exaggeration to say that America's progress in many areas of endeavor in the years ahead—indeed, the very survival of our free country—may depend in large part on the education we provide to our youth now,” the White House said at the time. This is stated in the report recommending the passage of the bill.

President Lyndon Johnson said in 1964 that more than 600 people had access to education through the NDEA student loan program. But more needs to be done to address affordability, Johnson said, noting that Americans used to spend between $ 000 and $ 4 on college per child.

“Ladies and gentlemen, this cannot continue,” Johnson added. “The problem is obvious, and we must solve it.” Higher costs should not put higher education out of reach.”

On the subject: Seven Ways To Write Off Your Student Loan Debt

Today, the average annual out-of-state tuition at a university is $ 15, with fewer and fewer people enrolling as the nation's student debt stands at $ 000 trillion and is growing every day. What started out as an altruistic parenting has now turned into a full-fledged crisis.

Government involvement in U.S. education harms the people it intended to help

Johnson, well known for his War on Poverty, expanded the education system in an attempt to give everyone a chance at college, a core pillar of the American Dream. To achieve his goal of universal access to education, he signed the Higher Education Act of 1965, which guaranteed loans for the middle class.

But after the law was passed, banks began to raise interest rates on student loans, and the system shifted to lucrative lenders, while borrowers piled up more debt. Colleges continued to raise tuition fees as federal aid increased. This created a trap for students across the country, Mitchell explains: the more colleges raised tuition fees, the more Americans had to borrow, and the more Americans had to borrow, the more colleges raised tuition fees.

Alice Rivlin, the first head of the Congressional Budget Office tasked with developing Johnson's student loan program, told Mitchell in 2019 that the idea behind federal loans was that "a college degree increases your future income, and therefore borrowing was smart." ...

But in hindsight, when asked what she thought about the way the loan industry developed, Rivlin told Mitchell, "We provoked the creation of a monster."

The average American has about $ 32 in student debt after graduation. Due to high interest rates, if the borrower does not receive sufficient income, it can be very difficult and sometimes impossible for the borrower to pay even the original loan amount.

For example, 59-year-old David Wise originally borrowed $ 79 in student debt, paid off $ 000, and still has $ 175 in debt.

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“This is a debtors’ prison,” Wise said.

It's even worse for parents who want to give their children a chance at higher education. Parent PLUS Loans are federal loans that parents can take out to finance their children's education, and the loan can cover school expenses and is not income dependent.

A system of uncontrolled borrowing has been put in place, and with PLUS loans having the highest interest rate of 6,28%, parents can often pay off debts for the rest of their lives simply because they wanted to give their children a better future.

US President Joe Biden has taken steps to address the student debt crisis. He began reforming student loan forgiveness programs and introducing free tuition at community colleges.

But even after these reforms, 45 million Americans still carry significant debt burdens, making it impossible for many to achieve the American Dream that Eisenhower and Johnson pursued.

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