College Debt: The Great Recession

An education is one of the most important tools a person can acquire. It gives them the skills and abilities to obtain a job, earn a wage, and then use that wage to better their lives and the lives of their loved ones. However, due to the seemingly exponential increase in the costs of obtaining a college degree, students are either being driven away entirely from earning a degree or taking out student loans which cripple their financial prospects well after graduation. Without question, the increasing national student loan debt is one of the most pressing economic issues the United States is dealing with, as students who are debt ridden are not able to consume and invest in the economy. Therefore, many politicians and students are calling

Over the past decade, it has become evident to the students of the United States that in order to attain a well paying job they must seek a higher education. The higher education, usually a college or university, is practically required in order to succeed. To be able to attend these schools and receive a degree in a specific field it means money, and often a lot of it. For students, the need for a degree is strong, but the cost of going to college may stand in the way of a successful future. Each year the expense of college rises, resulting in the need for students to take out loans. Many students expect to immediately get a job after graduation, however, in more recent years the chances for college graduates to get a well paying job

Here in the United States, there are many forms of consumer debt, which help contribute to the large sums of debt countless Americans find themselves faced with. Directly effecting many college students is student loan debt. Student loan debt is now the second largest form of consumer debt behind housing” declares the Federal Reserve Bank of New York (Grisales). This is due to the fact that student loan debt grew 7.1% in 2014 to $1.2 trillion (Grisales). If this statistic alone is not worrisome this next one is sure to be. The amount of debt in the housing market that helped to spark the last recession was only $1.3 trillion (Grisales). Due to the increased amount of debt required by students to attend college many students are feeling the wrath. According to the U.S. Census Bureau, “In 2014, 11.7 percent of females and 17.7 percent of males between the ages 25 and 34 were living with their parents” (Grisales). The fear of obtaining massive amounts of debt is driving the current generation of student’s to put off many future hopes and dreams. While causing them to move back home to save money. The current student loan crisis is crippling the economy and ruining the lives of American students.

Colleges are noticing a drop in students’ interest in a higher education, because it forces them to fall into poverty. Obtaining a higher education is a dream of many working class citizens, but the price to go to a choice college is not available economically. The majority of students use some type of student loan, they have become the norm for attending college (Johnston, Roten 24). College is becoming unaffordable to many lower class students. With tuition prices this high, students are backing out of school and looking for jobs that only require a high school diploma. Student loans should help people, but it is only hurting them because they feel like they can never repay it. Especially since student debt continues to rise. “Student loan debt rose by 328 percent from $241 million in 2003 to $1.08 trillion in 2013, according to the Federal Reserve Bank of New York” (Johnston, Roten 25).

College, originally deemed as the pointer to guaranteed employment, financial stability, and an indicator of success, has been declared in jeopardy. Topping the credit card debt and many household debts, the student loan debt has been pronounced the next potential financial disaster in the U.S. With 2014’s numbers currently exceeding $1.2 trillion, the debt figures have reached about twice of 2007’s remaining debt (Akers, 2014). Gone are the days when a parent could send a child to the state university to study their interests and finish off with a job offer, ensuring a respectable future. The average balance for a 2014 college graduate is $32,500, which will be dragging out of not only themselves but also their families (Rajan, 2014).

Student loan debt in the United States is expanding unrestricted each year. There are 36 million Americans today, holding over $740 billion dollars in student loan debt. (U.S. 2013) The current student loan system is intended to open doors to economic prosperity for those who could not otherwise afford to go to college. Research suggests that the unintended consequence of too much available student credit is real people losing prosperity and languishing in debt for extended periods of their lives. Reducing or eliminating the availability of student loans would have a tremendous impact on improving the lives of Americans. If things continue the way they are now, American’s will soon find college, and its implied ticket to economic

Researchers started in 2012, Seventy-one percent of all 18 million college students graduating from four-year colleges or universities and had some form of student loan debt. The student loan debt burden in the United States increased eighty-four percent since the recession, hitting an all-time high of $1.2 trillion. The average balance has also increased and now sits around twenty-nine thousand dollars,according to CNN Money. A large portion of these 18 million understudies has been told again and again that an "advanced education" is the way to landing a great position and lifestyle of the American Dream. They have been educated not to stress about the amount it costs and that there is a lot of budget guides.

In today’s society there is a lot of pressure on the current generation of students to go to college so they can get a high paying job. Students have two options: go to college to get a bachelor’s degree (or an even higher level degree) and go into tons of debt or, don’t pursue a college degree and avoid debt but not be able to have the lifestyle or career they might desire. The current debt of students today is higher than it has ever been. “Most students are graduating with average debts of over $24,000” (Jackson 535). Student debt not only hurts the borrowers by delaying the students’ life but the debt can also hurt the economy.

Over the preceding few years, there has been a swift surge in the level of student debt in the United States. Student debt has now exceeded credit card debt in order to become the second largest volume of household debt only lagging to mortgage debt. (Figure One) The idiosyncrasy that makes student debt stand out from other types of debt and liabilities is the fact that it cannot be resolved via bankruptcy. A consequence of this is the financial burden that an individual will have until the burden is repaid. This financial burden will not only affect individual economic outlook but also on the whole United States economy. Currently, more than forty million people in the U.S have student debt that totals $1 trillion. (Dynarski) This upsurge

In her Newsweek article “On the Coming Burst of the College Bubble” Megan McArdle, a Washington, D.C. journalist focuses on the concerns of the crippling financial struggles that college students continue to face. In this intricate article McArdle captures the essence of this crisis. Critical in her reading is recognizing that for some, the school system works, yielding decent jobs and an effective rate of return on investment; for the vast majority, however, too many college graduates are suffocating under a mountain of accumulated debt, with very limited opportunities for employment and no acquired skill. Why then do the vast numbers attend college? Many people believe that one must get a college education in order to gain the benefits that were assumed would go along with it: “an education that would last a lifetime, a better job, and

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 cost of tuition for higher education is quickly rising. Over half of college freshmen show some concern with how to pay for college. This is the highest this number has been since 1971 (Marill and O’Leary 64-66, 93). The amount of college graduate debt has been rapidly increasing also. With limited jobs available because of the high unemployment rate, college graduates find themselves staying in debt even longer. Although grants and financial aid are available to students, students still struggle to pay for their college tuition. Higher education costs are prohibitively expensive because the state’s revenue is low, the unemployment rate is high, and graduates cannot pay off their student loans.

College has proven to be more of a burden than a benefit. This note attempts to confront the costly troubles that leave student borrowers with more debt than they originally thought they bargained for. Congress has for a long time has struggled with finding a solid, workable solution to the student loan crisis. Likewise, many notes and scholarly articles have also tried to challenge the system to help student borrowers manage their unmanageable debt. This note will challenge the system from the perspective in which reducing college tuition is the end goal. If the end goal remains just that, unimaginable debt will inevitably turn into manageable debts.

Many young adults graduate high school wanting to further their education in college, must most are not in a financial position to be able to pay for it by their selves. In order to go to a university, they must take out a student loan. Student loans are burdened on to these youths at such a high rate that the total about due in student debt is greater than one trillion dollars (2. pbs.org). The debt from these loans is now higher than the debt

The cost of tuition at colleges and universities in the United States has seen a steady increase over last several decades. Since the 1980s, the list price for tuition has risen by roughly 7% per year, while the inflation rate has averaged 3.2% per year. The effect of this mismatch in the rise of the cost of tuition versus the average inflation rate has had monumental effects on the ability of students to afford a higher education. This, in turn, has forced more students to take out increasingly large amounts of loans, causing for the national student loan debt to grow to over $1 trillion dollars, more than total credit card