Case Study: Federally Subsidized Student Loan Debt

Thesis Statement: College is not something to put off until after you have graduated, students need to find ways to pay for college before they graduate.

The best options right now for a student with debt is to apply to the Income-Based Repayment Plan or the Public Service Loan Forgiveness Program if going into a public service job. This program adjust the loan payments to be fifteen percent of their discretionary income (Atteberry). This means that their monthly loan payment is fifteen percent of what they make that is above the federal poverty level. The best part about this program is that “after twenty-five years after making payments, the borrower’s remaining balance if completely forgiven” (Atteberry). The only borrowers that can apply to the Public Service Loan Forgiveness

Problems in the student loan market are not just harming students but are also exacerbating problems with the United States’ recovery from the Great Recession. New York Federal Reserve Bank data has found that outstanding student debt topped $1 trillion in the third quarter of 2013, and the share of loans delinquent 90 days or more rose to 11.8 percent. Furthermore, the share of 25-year-old Americans with student debt increased to 43 percent in 2012 from 25 percent in 2003, while the average loan balance rose 91 percent, to $20,326 from $10,649 (Gage and Lorin). More than 40 million Americans are in student loan debt and because of this, more than 40 million Americans are not able to stimulate the economy as they are not able to buy houses or cars, or start businesses or families (Applebaum). In Wisconsin alone, student loan debt has resulted in a loss of over $200 million annually from new car purchases, while also resulting in middle class households with student loan debt overwhelmingly renting homes instead of owning them (Vanegeren).

Most students do not make enough money to be able to pay for college debt free. In addition, most families don’t make enough money to pay for the college costs upfront. For this reason, students have been borrowing money from private loans to be able to attend a college/university. Although the government might give several students, who apply, money to pay for books and housing, it does not cover the total cost to attend college and obtain a degree. This might not be encouraging for students who wish to receive an education but do not want to owe money in the future. Loans have been scaring off students who wish to further their education and live their lives comfortably after college. If student loans were to be forgiven, graduates would not have to worry about owing a large amount of money.

College students graduate with an average student loan debt of approximately $37000. Of course, that's not the whole story. Millions of college graduates have student loan debts ranging from $50,000 to over $200,000.

As of 2016, the average college graduate owes thirty-seven thousand dollars in loans (Glum). As a whole, Americans owe a grand total of 1.3 trillion dollars. These are figures that grow every year, and worse, the number of people who are defaulting on their payments grows as well. The issue of the student loan crisis is serious, which is why potential solutions are now being discussed. Presidential candidates for the election of 2016 have discussed solutions that range from Hillary Clinton’s debt-free college plan to Bernie Sanders’ free tuition plan funded by taxing Wall Street, while numerous scholars and business intellectuals have suggested amending the bankruptcy code to allow for discharging student loans as a solution to the crisis (Josuweit). In this essay, I will primarily discuss the numerous but limited ways amending the bankruptcy code can alleviate the crisis, and then I will offer alternate solutions to supplement the aforementioned solution.

Should student loan borrowers be forgiven for their debt? The cumulative total of student loan borrowing has already reached $1 trillion dollars already make up more than half of what Barack Obama is pushing to cap the amount any borrower must pay back and forgive outstanding debt after 20 years, even so calling to forgive some or all of the debt that is escalating. Robert Applebaum, the Author behind the Student Loan Forgiveness Act, believes that student loan should be forgiven to highlight an alternative approach to economic stimulus whereas Justin Wolfer, believes that forgiving loans will have a stimulative effect on our economy and put thousands of dollars in the pockets of college grads. Student loan borrowers should not be

The applicant is then assessed to discover if they are eligible for one of many loan forgiveness programs. Basic student loan forgiveness programs include Public Service, Total Permanent Disability and teacher Loan Forgiveness.

Over the last decade student loan debt has risen substantially and is now one of the largest form of personal debt in America, totaling about one trillion dollars, with 71 percent of students who earn a bachelors degree graduating with debt, with the average amount of debt being $29,400.

Student debt is becoming a big issue that is affecting many individuals in the United States, some having to decide between going to school or being in debt for years after they have finished their education. Most people want to have a great paying career and need to go to school for many years but do not have the financial means to pay for college or qualify for financial aid, seeking other options to get their education such as applying for student loans or credit cards. College students should not be worried about how much debt is being accumulated and how it can affect them in their future. This paper will examine the possible solutions to student debt such as student forgiveness, allowing bankruptcy, or eliminating private lending agencies. Having these options will help students with a good paying career from living paycheck to paycheck and become more financially stable.

In the U.S. students are encouraged to earn a college degree, but the cost of an education turns many away. “Driven by the allure of a decent salary with a college degree, Americans borrowed to go to school. Outstanding student debt doubled from 2005 to 2010, and by 2012 total student debt in the U.S. economy surpassed $1 trillion” (Mian, Sufi 167). There are plenty of opportunities to obtain funds for college, including one of the most common, student loans. A student loan is defined as “a common way to fund education, specifically college and graduate school, and they provide educational opportunities that you otherwise may not be able to afford” (Barr). Student debt is at an all-time high in America. Over half of all lower income

Student loans are becoming an increasingly heavy burden for their borrowers in the United States. In a personal interview conducted on October 20th, 2015, a close personal friend, Cory Hays, and the sister of the author, Melissa Korpela, were interviewed regarding their student loan debts and status of re-payment. Hays has $80,000 in student loans, but cannot pay them back because he was unable to find a position in his field, kinesiology (Hays, 2015). To make ends meet he works as a server and works less than full-time and also has a second job being a caretaker for the building he lives, which provides a small salary and a reduction in his rent (Hays, 2015). As such he is able to be in forbearance until such time that he can get full-time employment (Hays, 2015). Also, the author’s sister has $65,000 in student loans for her bachelor’s level teaching degree

“Those who earned a bachelors degree in 2011 graduated with an average of $26,000 in debt” (Economist). This is an alarming statistic for me, considering that “the debt per student has doubled in the past 15 years,” so that figure doesn’t seem to be going down any time soon (Economist). I believe that this student loan debt crisis is something that should be resolved with the utmost time-efficacy in Washington. Increasing Pell grants is a great start, but more needs to be done to truly fix the crisis.

In the United States today, the number of students graduating college with student loan debt is quite astonishing. In the article titled, “How the $1.2 Trillion College Debt Crisis Is Crippling Students, Parents And The Economy”, we will examine and break down the student loan debt crisis by the numbers. Today, almost two-third’s of students graduating college are graduating with an average of $26,000 in debt. For most students, $26,000 is a lot of money when the average annual income for a first year graduate is only in the mid $40,000 a year range. According to the Consumer Financial Protection Bureau, student loan debt has reached a new milestone, crossing the $1.2 trillion mark (Denhart, 2013, Introduction, par. 2). With student loan debt levels

The student loan trouble is surely a big problem in our society: college students are struggling giant quantities of student debt, and they 're defaulting on that debt and making their potential to get admission to future credit score awful already. The procedures to student loan debt series are filled up with problems, in addition to wrong recovery strategies and critical concerning compensation alternatives. However, the recent public procedure discussions pass over among the key problems that correlates to the debt mess, leading to proffered solutions that leave out their mark too. Start with those top issues about student loans: They said student debt loans signify averages, even though the quantities owed may be dramatically different from each student. This is why answers which includes the mandated debt calculator on college web sites or the cutting-edge university Scorecard do no longer help the issues; the disclosure of time-honored statistics does no longer impact student desire meaningfully.