Student Loans

USF president: Student-debt crisis is real

USF President on student debt, politics
USF President on student debt, politics

Since more than 40 million Americans have at least one student loan on the books, finding a way to reduce this debt burden should be a priority, said Judy Genshaft, president of the University of South Florida, on Thursday.

"It is a very important problem to work with and to solve," Genshaft said on CNBC's "Power Lunch." "Many of our students are first generation to come to college, so it is very important that they know how to deal with student debt, but very honestly, it could be from wealthy parents as well, that the students don't know how to deal with debt."

While some experts say it's too early to conclude the loans are dampening the economic recovery, raising awareness among students to combat growing student debt is critical, she added.

Earlier this month, researchers at the St. Louis Fed's Center for Household Financial Stability said in a paper that student debt may "present a significant headwind for the aggregate economy."

What makes student debt particularly concerning, the economists wrote, is that much of it is held by younger borrowers — which may inhibit them from buying homes, investing, or saving for retirement as they age.

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Though Genshaft may be an advocate for eliminating student debt, she said students should not expect public colleges and universities to become tuition free like some politicians suggest.

"It is very difficult for college to be free unless there is the state or the federal government that is going to help pay for it," said Genshaft. "It's a very large organization, and it does require funding."

A potential way to deal with this issue is for students to focus on getting experiences that will prepare them for the job market after they graduate. Genshaft also said that the University of South Florida has a requirement that students take a course on fiscal responsibility.

"[Students] are getting the jobs. That is something that is very much a part of our public mantra right now."

— CNBC's Akane Otani contributed to this report.