How 42 is Freeing Youth from Student Debt

Loan-Free Education

Imagine starting your first job as a software engineer and being able to say that you have ZERO student loans. That is entirely possible at 42 where there is no tuition and no hidden fees. We are creating alternative pathways to the workforce as a software engineer.

Since the admissions process at 42 is rigorous, every admitted student has their tuition paid for. Basically, every student that attends 42 has earned a spot here. The idea of free college-level education is not a new idea and can be found in other countries. Around the nation, there have been some recent state proposals to increase access by providing free college. This is great, but there are some caveats. For example, in New York State you need to live and work in New York for as long as the state paid for your tuition. At 42 there is no tuition to pay back, and we will always be free.

The High Cost of College = Unequal Access

The Institute of Politics (IOP) at the Harvard Kennedy School of Public Policy found that 7 out of 10 millennials consider financial issues such as student debt when deciding whether they should pursue a college degree or not. The same sentiment has been heard through other sources. According to the New York Times, a recent Wall Street Journal/NBC News poll revealed that 83 percent of respondents stated that reducing the cost of student loan debt was the biggest issue among a long list of domestic and foreign policy proposals. For many, this issue has become a generational divide. For our parents and grandparents, they were able to graduate with little to no debt, and could even work a summer job to help pay for their tuition.

Since 1985 college tuition has increased by nearly 500%. This is far above the normal overall inflation rate of 115% since 1986. According to Forbes, family income increased by 147% since 1982. This is still far less than the rate of college tuition and makes it impossible for many individuals and their families to pay for college out of pocket. It is not surprising that people don’t want to take on that burden. The high cost also makes earning a college degree even harder for students from low to middle-class households.

The Burden of High Student Debt

Student loan debt can be an even bigger issue in regions where the cost of living is high. Steep living costs often make it impossible for high-wage earners to qualify for income-based repayment plans. Many new college grads find themselves struggling financially. According to Student Loan Hero, among approximately 44.2 million borrowers, Americans owe over $1.48 trillion in student loan debt. What makes it worse is this figure is $620 billion more than the total U.S. credit card debt.

For people who graduated from college in 2017, the average student loan debt went up six percent since 2016. The average student debt is now around $39,400. According to Harvard, 42% of all 18-29 year old have student loan debt. Business Insider found that high levels of student debt can have a negative impact on other areas of your life as well. This includes one’s ability to buy a home or car, or even investing in a business venture. We also cannot forget about people who default on their loans and are forced into further financial hardships. According to Business Insider, the Wall Street Journal found that around 4.6 million Americans defaulted on their student loans. The amount of defaulted student loans adds up to $84 billion dollars.

Further Financial Loss through Loan Interest

These figures focus on federal student loans. But there are also many Americans who are paying back private student loans. Some people are paying back both private and federal loans. When an individual initially borrows money through a student loan, they may not think about how much more they need to pay back in interest rates. Some private loans may have higher interest rates and/or variable interest rates. These rates can become higher over time than a fixed rate. For example, if you took out a 15-year, $50,000 loan with a variable interest rate that increases from 5% to 7% over time (so just a 2% difference) it could cost you nearly $10,000 MORE in addition to your regular interest charges.

These are the types of “hidden fees” that many student loan borrowers become victim to. Many people are not knowledgeable about student loans. In a recent article in Bustle, Kaitlyn Cawley wrote about her own experience with student loan interest, “When I was 18, I fully believed that taking out student loans was the only way to achieve my dream and my parents’ dream for me — to transcend my working-class upbringing. I was desperate and uninformed and, because of this, I entered into a dangerous relationship with a loan company that will last half my lifetime.”

Impact on the Knowledge-Based Economy

Young people looking for a job can feel like they are stuck in a loop. They are told they need college experience before they can get hands-on experience that will hopefully lead to a job offer. In this quest for a job, you may take out large student loans that you will eventually have to pay off.

What if you want to become a software engineer?  According to CollegeCalc the average four year degree in Computer Science (aggregated across the United States) costs around $40,750 per year. After four years that adds up to $163,000. Quartz reported that Code.org found there are currently 530,000 computing jobs open in the United States. The National Center for Education Statistics reported that only about 60,000 students graduated with bachelor degrees in computer and information services. Filling less than 10% of these jobs is a BIG problem for our knowledge-based economy.

How 42 Helps Students and the Economy

The combination of a knowledge-based economy and unaffordable computer science degrees is a recipe for disaster. 42 is free because we want to make education accessible. We also want to help the national economy and train enough software engineers to match the job market demands. We’ve cut the time and cost of learning computer programming and designed a system that trains students for the 21st century.

The demand for software engineers is on the rise. 42 is designed to help you get hands-on experience so you can secure your first job. We use project-based learning, skills mastery, peer-to-peer correction, and gamification to foster learning. At 42, students learn computer programming to not just sustain our digital economy, but to change it, lead it, and impact the world. And if you need another reminder, tuition truly is 100% free to any student who gets through our rigorous admissions process.

For more information about 42‘s admissions process, which involves an immersive 28-day coding experience, visit our page here.

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published by Stacey Faucett – June 11, 2018