Cost Of Student Debt

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).

With the ever-increasing tuition and ever-tighten federal student aid, the number of students relying on student loan to fund a college education hits a historical peak. According to a survey conducted by an independent and nonprofit organization, two-thirds of college seniors graduated with loans in 2010, and each of them carried an average of $25,250 in debt. (Reed et. al., par. 2). My research question will focus on the profound effect of education debt on American college graduates’ lives, and my thesis statement will concentrate on the view that the education policymakers should improve financial aid programs and minimize the risks and adverse consequences of student loan borrowing.

After the United States ‘Great Recession’ in 2008, many onlookers have been searching for other aspects of the economy that may eventually present a bubble similar to that of the housing market. It does not take long to locate a potential hazard as the cost of tuition has risen approximately 26% over the course of the last decade (‘Tuition and Fees’). The consequence of this increased tuition is having a negative effect on the future that most graduates try to obtain once they complete school. Some students are required to change their career choices due to the overwhelming debt; examples of this could be they are required to take a higher paying job, even if they do not want to, so they can afford their previous choices (Zhang). Many years ago the notion of being so overwhelming in debt seemed unfathomable; but as student loan debt is estimated at $870 billion to $1 trillion, students’ willingness to acquire debt is strong and has no signs of slowing down (Razaki, Koprowski, Lindberg). The steadily increasing student loan crisis will cripple the United States economy if it goes unchanged.

When we think about college and a college education, it seems as though our first initial thought is the student loans and debt that can result in achieving a college degree. Looking back, student debt has risen drastically and has made it extremely stressful for students and families. Many people go through their entire life in debt, especially from being a student. Student debt has always existed; however, now, it is so extreme, almost all students who attend college find themselves deep in debt, and must continue paying off their debt many years after they graduate. For the past two decades, student debt has risen, illustrating how big this social problem has become. The reason student debt is a significant social problem is because of how much it can effect a person’s life, and their families lives, that can carry over to their future. Although there were many things that led up to and impacted the drastic student debt that is now being faced by many students around the world, the corporation Sallie Mae, was the essential factor in why student debt has skyrocketed to unreasonable proportions. Sallie Mae provided the first type of corporation that changed its focus from helping students, to helping themselves. The history and scope of the student debt can help us understand that the corporation, Sallie Mae, was the main cause of this problem.

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.

Individuals dealing with student debt "are postponing marriage, childbearing and home purchases, and pretty evidently limiting the percentage of young people who start a business or try to do something entrepreneurial," said Mitch Daniels, president of Purdue University and the former Republican governor of Indiana (qtd. in Holland). Because it’s almost universally accepted that college is the key to success, students are finding themselves falling head-over-heels in large amounts of student debt justified only by these universal standards. Student debt doesn’t just burden the individuals who are liable, the sheer amount of debt has begun to rattle institutions and financial patterns that are at the core of American society (Holland).

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 article, “Student Loan Debt 101” by Indiana University, shows how many students are graduating college with a diploma, however they have a significant amount of student loan debt. Students, such as high schools seniors or even college freshman are not taking into consideration the importance of student load debt. People would think that these freshman in college would have thought about this concern thoroughly but when they indeed do not. Indiana University has created a few ways that this issue could be addressed.

Student Loan Debt Isn’t A Myth,” it describes how student loans are a huge crisis, and the

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

While finishing up college, student Andrew Kirk explains that “before [he] even knew about [his] options for repayments, [he] had a very pessimistic view about how things would turn out for [him]”(Nadworny). An excelling amount of students have thousands of dollars in student debt and are fearing the dreadful long years that it will take to repay it back. This essay will argue that student debt has increased extremely over the years and how certain solutions can terminate debt for good. Today, the fear in every high school

Throughout the years student loans has increasingly began to affect our economy and is a large and growing issue. Mounting student loan debt is ricocheting through the United States, now affecting institutions and economic patterns that have been at the core of America 's very might (Holland 2015). General economic principles are affected by the constantly growing student loan debt in the economy. Macroeconomic indices are identified and defined with their roles in student debt growth and affect in students’ lives. A proper evaluation, decision, and forecast will be revealed to suggest a better approach at the growing issue. The cost of education continues to increase making it difficult for individuals to afford on

The average American’s financial ability and confidence is being crushed by this mountain of student debt. In turn, more and more people are not able to purchase their own house, or start their own business due to the pressure of paying back their overwhelming student loans. America, being a consumer economy and 60 percent of jobs are created by small businesses, this rising college tuition cost is affecting the majority of Americans and having a crippling effect on the whole economic system (Korkki).

A crisis looms in the American economy tethering directly to the accretion of student loan debt now surpassing one trillion dollars and worsening. In fact, bankruptcy attorneys nationwide have begun to witness potential clients with burdening student loan debt in recent years as never before.

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