Default : The Student Loan

889 WordsNov 14, 20154 Pages
Introduction 40 million Americans owe about $1.2 trillion in student loan debts and roughly 16 percent of those loan balances are in forbearances alone (Delisle). To start with, forbearances allows borrowers to relinquish a delinquency status and postpone payments for up to three years. With that in mind, a majority of borrowers initially believe that forbearances are a good thing because it allows them to have a leeway before they can make their next payment. However, I believe that forbearances are just one of the underlying problems of the student loan industry because it creates the illusion of a safety net. The victims of the industry come from varying backgrounds and PBS highlighted them in the documentary, “Default: The Student Loan Documentary.” Perhaps the most daunting part of the video is that most of the borrowers shown in the documentary are still dealing with these debts for decades now. Some of these borrowers are usually a paycheck away from being homeless or starved and they cling to these benefits as a way to postpone further damage. In fact, what actually happens is that interests still accrue during the forbearance period and people end up having higher monthly payments than they did before the period. Forbearances are just a part of a very profitable system that prioritizes profits over the welfare of the students. It does not even seem to be helping at all because as of 2015, over 7 million Americans are in default for not sending payments. This is an
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