The phrase ‘To get a good job, get a good education' embodies a traditional set of American values. Throughout its history, this country has presented education as the key that unlocks the American dream. Today, thanks to mounting student debt, that dream is becoming a nightmare for many young people and their employers.

How bad is the problem? While the degree of debt varies among students, according to the Project on Student Debt, a comprehensive study conducted by the Institute for College Access and Success, students will on average owe $26,600 upon graduation; one percent of the graduating populace will owe more than $100,000 and one out of ten will be strapped with $40,000 or more in student loans. Per government figures, total accumulated student loan debt has hit an all-time high, surpassing $1.2 trillion.

This creates a “damned if I don’t, damned if I do” trap for young people. During hard times especially, they’re encouraged to turn to higher education to gain traction in the job market, yet a poor economy means they can less afford the large loans this requires. Worse, following graduation, sluggish growth means they are still frequently confined to low-paying jobs.

No matter what job they land, financial stress can significantly affect their performance. The burden of college loans, combined with the newly added responsibilities of paying rent and purchasing basic necessities, can carry on for years. Inadequate pay combined with a widespread dearth of financial literacy causes debts to pile up, affecting workers well into their 30s and beyond. As the pressures mount, employees of all stripes are inevitably distracted from their job responsibilities.

Hence our refusal as a society to address the affordability of higher education has become a huge drag on workplace productivity.

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Mark Singer

Mark Singer

Singer, CFP, is the author of three books, a frequent public speaker and the creator of The Financial Literacy Toolbox.