Introduction. In The Recent Years, There Has Been An Increasing

1016 WordsApr 13, 20175 Pages
Introduction In the recent years, there has been an increasing difficulty in paying tuition fees for college students. This has been brought about by high cost of living and inflation. In addition, college tuition fees today as compared to 50 years back have increased exponentially. As a result, more students are opting to applying and taking student loans provided by the federal government. Consequently, statistics show that the amount of student dept is souring. This has led to economists start debating on the impact the ever-increasing student dept has on the economy of the United States (Gleeson, 2016). The fact that the student dept is increasing and that experts have warned that students with loans inhibit their future life…show more content…
123). This would mean that, by forgiving such an amount of money will be a relief to the students but also will increase burden to the common tax payer. This is because, it will have much economic implications before the void left by the outstanding loan is filled. On the other hand, research indicates that most students with outstanding loans do not have a problem paying back what they owe. According to Dynarski (2015), a survey conducted in 1999 showed that medium debtors only spend up to 5% of their income in paying back the loan. The amount is almost the same to what families use for entertainment. Needless to say, the rate of defaulting has increased in the recent past (Gross, 2014, par. 6). However, the highest numbers of defaulters are those that attended for-profit colleges or dropped out. These types of students often have a lesser amount of debt as compared to other college students and are considered minority borrowers. Counterargument By forgiving the students’ loans, it would result to an economic stimulus. This is likened to the stimulus that happened after the 2008 financial crisis. Consequently, Ellison (n.d. par. 7) speculated that more than two generations
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