In 2019, the Dam Will Break: Student Debt Predictions and Solutions


With the density of colleges and universities in the Boston area, we don’t often recognize how inaccessible higher education has become for the majority of the country. In fact, seven out of 10 college graduates today have outstanding student loans. And while many of us believe that education is a “must-have,” it’s alarming how structurally straining—in many cases prohibitive—the education system has become.

In 2018, student debt hit a record high of $1.5 trillion, with no signs of abating. We encourage education; we build a system that requires education. Yet we leave generations with a financial burden that shapes and weighs down their lives.

This iterative cycle has reached its breaking point. 2019 will be a watershed year as the cracks break the dam.

Despite the high price tag, many educational institutions aren’t financially stable, and in recent years, struggling schools that had been serving a local community have been acquired by other, larger universities with higher tuition rates. For example, Wheelock College was folded into Boston University last year.

Other schools have simply gone out of business, leaving students holding the bag with debt incurred and an incomplete education. Just last week, the federal government moved to forgive $150 million of student loans, coincidentally just 0.01 percent of the total debt, for schools that closed their doors. Clearly, loan forgiveness is not the answer.

Now companies and organizations are taking the lead, creating a new dynamic in the employment culture. In 2019, we’re seeing some of the country’s strongest organizations rolling out a new kind of benefit—student loan and college savings benefits—to their broad range of employees. Some potential modifications to the tax code could encourage even more employers to join their forces.

Benefits like these catalyze faster change in our culture and begin to help our workforce find some help with their student loan debt by setting student loan repayment on level footing with tuition reimbursement. This space will quickly evolve with new innovators, with Boston leading the way. In our backyard, Edmit is making college more affordable for prospective students, and at Gradifi, we’re helping people consolidate and refinance existing student loans, pay down debt faster, and save up for college. [Editor’s note: Chang’s wife, Shereen Shermak, is an investor in Edmit.]

I’m looking forward to removing this barrier for the next generation.

[Editor’s note: This is part of a series of posts sharing thoughts from industry and technology leaders about 2018 trends and 2019 predictions.]

David Chang is the CEO of education benefits startup Gradifi and an Entrepreneur-in-Residence at Harvard Business School. He has held operating roles at five startups and is an angel investor in 40 companies. Follow @changds

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