Essay Student Loan Debt Relief

1460 Words6 Pages
Student Loan Debt Relief

Student loan debt relief is a controversial issue in America today. Student loan debt affects twelve million college students, roughly 60% of all college attendees, per year (Student Loan Debt Statistics). Student loan debt relief rose to the forefront of economic news during the financial market crash of 2008. The U.S. Government has developed a debt relief plan that extends payments over a 25-year period, with a full forgiveness of all remaining debt at the end of that 25-year term (Ensuring That Student Loans Are Affordable). During this repayment period, payments can be suspended during times of unemployment, giving hardship students a break from their student loan payments. Many people feel that student
…show more content…
Another negative view concerning student loan debt repayment deals with the amount of loan debt that a borrower may accrue. With this new program in place, borrowers may feel free to borrow higher loan amounts, knowing that they will have a 25-year period for repayment (Redd). This puts a heavy burden on the lending institutions, as far as the debt structure is concerned, since the larger loan debt load will be harder to maintain that smaller ones. The last critical view of student loan debt relief deals with the lending institutions themselves. Banking institutions originally offered student loans that were to be repaid within a 10-year period. The new student loan debt relief plan extends this repayment period to 25 years, and this will create a hardship on the banks that were the original lenders. Since the recovery time will be much greater for these debts, these banks will have less available funds for future loans. Many feel that decreased lending power from the banking institutions may cause more stress on our economy in the long run. A large part of economic development rests in the ability of banks to keep loaning money, and if cash flow from loan repayment slows, it can take a toll in future lending (Keeton). There are several possible resolutions to
Get Access