Headed to college? For many, student loan debt remains the only option

For Haley Reyes, there were two questions looming over her senior year in high school at the Urban Assembly New York Harbor School in Manhattan.

First, was whether she’d get into her dream school of Syracuse University.

Second, was how she’d pay for it without going into crushing debt.

The sticker price at the private university tops $85,000 a year for tuition and housing, even as Syracuse says most students receive some type of aid.

Reyes, whose father died when she was 12 and whose mom earns a middle-class wage to support three kids, qualified for just $5,000 in federal grant money.

Her best option would be to snag merit-based grants and scholarships, which seemed out of reach for a student whose family could afford the basics. The other option is debt – tens of thousands of interest-bearing loans from the government in the hopes that one day her income will be high enough to pay it back.

“You start to wonder, is my family going to help me? Are the loans going to be enough?” said Reyes.

This month, the Supreme Court is set to weigh in on President Joe Biden's plan to forgive some student loans for 44 million Americans, which he says will offer young Americans "breathing room" after the pandemic. But even if the high court greenlights the program, it won't benefit the Class of 2023, which faces record-high tuition costs.

The answer for most of them will still be debt, adding to the already eye-popping $1.6 trillion owed to the Education Department -- a number that is triple what it was 15 years ago, according to the government, and has turned the federal agency into a major U.S. bank.

In interviews throughout their senior year, Reyes and other graduating students told ABC News they were no longer convinced a college degree was a kind of golden ticket that could help them achieve their dreams. Several students cited online posts by strangers lamenting their debt and the lack of high-paying jobs.

Still, the high school seniors said they saw few other options to find a high-paying job. The question of affordability can be a tough calculation, particularly for young people footing the bill on their own.

“Since most people don't pay the sticker price, it's a very weird thing to have one of the biggest expenses in your life have a price tag on it that's completely unknown,” said Phillip Levine, a professor of economics at Wellesley College who wrote a book on the complexities of college pricing.

“That doesn't happen really in anything else that you buy: a house, a car, nothing else, you always have at least some idea. A college education? For the most part, you really just don't know,” he said.

It’s a system even Education Secretary Miguel Cardona agrees is broken.

In an interview with ABC News, Cardona said he believes higher education remains a great “equalizer.” Graduates of four-year universities still outearn their peers with only a high school degree and are less likely to face unemployment. And in addition to the student loan forgiveness plan, the Biden administration has expanded programs that erase debt for teachers and public servants, while lowering monthly loan repayments based on income.

But avoiding burdensome debt often still depends upon family money, not merit -- something Cardona says the country should pull together to fix.

“Think about the wasted talent and potential in this country because we're not making it more affordable. It works for some, but not enough,” Cardona told ABC News.

The reason for soaring college costs is complex. Republicans argue dumping government money into the education system through loans has mostly encouraged colleges to spike prices. They want to pull back on the federal loan program or eliminate it entirely, steering kids like Reyes toward trade schools or affordable community colleges instead.

Democrats, on the other hand, point to years of disinvestment in higher education during the Reagan administration and by state governments that pushed costs back onto students.

“I think we’re all to blame,” said Javaid Siddiqi, president and CEO of The Hunt Institute, a North Carolina-based nonprofit organization that focuses on education research and policy.

One problem, he said, is that communities encourage kids to dream of college to better their lives, but there’s little infrastructure supporting lower-income or middle-class kids to navigate the system. One example is the form to apply for financial aid. The form, known as the "FAFSA," is so cumbersome to fill out that some $3.6 billion in Pell Grant money was left on the table last year.

“We need more disruptors who are willing to think differently and think about it from a consumer standpoint,” said Siddiqi.

Reyes’ close friend, Trinity Jennings-Pagan, whose dream school is Harvard, says it’s not fair for politicians to push lower-income high school students toward trade schools or community college that might be less expensive but not be a good fit.

“It's almost like telling someone they're not worth school when there's a price tag that is out of their reach … I believe education is a right,” said Jennings-Pagan.

Sara Harberson, a former college admissions officer who now runs her own consulting business called Application Nation, said their ability to pay full price definitely makes a difference. Colleges will typically favor enrolling students who can pay more than those who require financial aid, she said. That's in part because wealthy alumni prefer to donate to a football stadium or a building named in their honor than to donate to financial aid programs.

“I felt very strongly that the most important thing that a college can invest in is going to be that financial aid budget so that you can get the strongest student body possible,” she said of her time as an admissions counselor. “But, you know, sometimes, the football stadium is going to win out.”

In the end, both Reyes and Jennings-Pagan aren't going to their dream schools. Reyes decided against applying, believing it would be a "useless application" since she couldn't afford it.

Jennings-Pagan, whose grades were exceptional despite her own family hardship, was offered a free ride at Syracuse and agreed to attend there in fall. She said she has embraced Syracuse and has let go of Harvard as the "perfect" school.

For Reyes, she is worried that her academic struggles in her early teen years – when she was still grieving the loss of her dad only to be hit with a global pandemic and isolated from her peers – will make her ineligible for financial help, even though they don't reflect the student she is now.

This spring, she was accepted at the University at Albany, an in-state public research university whose sticker price is about a third of Syracuse. But she says she still needs scholarships to cover about $10,000 a year – an unfathomable sum for someone just entering adulthood. One scholarship program has already rejected her.

She wonders, will there be a job after college to pay it all back?

“College is like a gamble,” she said. “It is never guaranteed to ever (get you) where you want to be. Like there is always something in the way.”