Student loans can be ‘simple’ and ‘automatic.’ Other countries offer lessons to the US.

Editor’s note: This story is one in a three-part series from The World’s Global Classroom project with the Lumina Foundation about student debt in higher education across the globe. The second and third stories focus on the situations for students in Denmark and Cambodia.

Brooke Samuelian graduated from West Chester University in Pennsylvania with a bachelor’s degree in forensics and toxicological science in 2013.

A decade later, the Philadelphia resident still owes about $25,000 in student loan repayments.

“I’ve been pretty consistent with my payments, and it’s like the number doesn’t go down,” Samuelian said.

Samuelian is hardly alone.

Federal student loan payments in the United States resumed last week, bringing an end to a three-year hiatus that began during the COVID-19 pandemic. More than 43 million Americans will once again face interest charges this month, with full payments resuming in October.

For many borrowers in the US, making those payments is a challenge — the national average per borrower is around $35,000. Student loan debt in the US is extremely high globally, second only to the UK, according to a 2022 Lending Tree report. 

Before the pandemic, Samuelian worked full time at a pharmaceutical company and made regular payments on her student loans. Though, she still had to pick up a side job waitressing for additional income in order to manage other debts while making her student loan payments.

Amid COVID-19 restrictions, she wound up losing that side job when the restaurant where she worked closed temporarily, which led to a significant decrease in income, she said.

Now, Samuelian, who works at Syndax Pharmaceuticals, is considering whether to go back to waitressing to afford payments on all her debt, not just student loans.

“I’m not going to be able to pay other loans and things down as quickly with these payments resumed,” Samuelian said. “So, it will definitely have an impact.”

Many borrowers in the US are in the same position, having to shoulder more than one job to make ends meet. Upon graduation, 59% of borrowers expect to take a second job or side hustle to make their loan payments, according to Insider. Similarly, a 2022 survey found that 62% of Gen Z workers juggle a side gig on top of a full-time job.

It’s a story that’s all-too-familiar to economist Susan Dynarski, a professor at the Harvard Graduate School of Education and an advocate for President Joe Biden’s new loan forgiveness plan.

The Supreme Court rejected Biden’s earlier plan to wipe away $400 billion in student loan debt.

Dynarski said that she believes that attending college should not lead to financial hardship for students.

“Student loan repayments can be humane and sensitive to people’s financial situations,” she said. “And the more simple and automatic it is, the more effective it’s going to be.”

Dynarski pointed to Scandinavian countries that view education as a public good. Sweden, Norway and Denmark are among at least a dozen EU countries that provide free tuition to public and private universities as well as loans to cover living expenses, making education highly accessible. According to Accredited Schools Online, 22 countries around the globe offer free college.

Stipulations vary, though. Some countries only make free college tuition available to citizens, while others let international students earn a degree if they know the local language, according to Accredited Schools Online. Others require nominal fees. In many European countries, other Europeans study for free, but non-Europeans pay more, the site says.

And whether students pay for their own living expenses also differs from place to place.

What is life like in countries where students don’t have to worry so much about student loans? The World talked to students in Denmark to find out.

Free college, though, doesn’t guarantee that students graduate on time.

In Argentina, where tuition is free, degree programs take an unusually long time to complete — five to nine years — and the country faces one of the highest dropout rates globally, at 73%.

Some countries, while not making tuition free, strive to make higher education affordable.

England, while charging comparatively high tuition fees for Europe, caps the amount at about $12,000. It also maintains an efficient loan system to support students, according to British economist Lorraine Dearden.

“Every single student who goes to university in the UK is entitled to a loan to fully pay their fees, and 95% of students take out these loans,” Dearden said.

On average, students in the UK borrow twice as much as their American counterparts. However, an income-based repayment system provides flexibility, automatically adjusting repayments based on an individual’s income. This mechanism proved invaluable during the COVID-19 pandemic, Dearden said, when job losses led to payment suspensions.

“The beauty of these loans is that they’re done through employer withholding, so the student does nothing,” Dearden explained.

Students only pay when in a job and earning above the payment threshold. The loan holder never has to do anything after leaving college — it’s all automatic.

“The employer calculates whether they are above the threshold in the current pay period and deducts if they are,” she said.

And if someone switches jobs, “the new employer is informed that they have to make deductions,” she said.

Even so, the system has its issues. In June, The Guardian reported that outstanding student loans in England surpassed 200 billion pounds ($251 billion) for the first time — 20 years earlier than projected, as the number of university students continues to exceed expectations.

Recently, an Ontario mayor said she can’t afford a home in the township that she represents due to outstanding student loans in England, CTV News reported in August, and a public Facebook page devoted to complaints about student finance in England has garnered over 1,300 members.

Student finances are expected to be a battleground in next year’s general election, The Guardian adds.

But what happens in other countries when there is little to no flexibility with repayments?

In Colombia, university fees are set according to one’s socio-economic status. But access to quality education remains a big challenge. And recently, the country experienced the pitfalls of inflexible repayment systems.

When COVID-19 hit, borrowers out of work due to the pandemic struggled to meet their loan obligations. Dearden said Colombia’s system “imploded” and the resulting crisis prompted a shift to an income-contingent loan system for new students.

Wherever you live, loans can be a great option to fund your college education, unless you don’t pay them back. In Nigeria, failing to do so can even land you in prison.

Dearden maintained that going to college in any country carries inherent risks but argues public-funding mechanisms are vital to ensure affordable access to higher education.

“If the government doesn’t get involved, there will be underinvestment in higher education,” particularly for students from disadvantaged backgrounds whose parents cannot afford to support them, she said.

In Cambodia, the government provides little support for higher education. That means that students there must be resourceful. Hear from some Cambodian students about how they’re making it work, despite the constraints.

For borrowers in the US like Samuelian, time is of the essence.

“I think, you know, [the deadline to repay student loans] has been extended a few times. So, it’s like people hold out hope that maybe something will change. Maybe there’ll be another extension, but I guess our time has run out here,” she said.