Loans Now Top A Trillion By Rohit Chopra

Student loan debt has become a discouraging problem throughout today’s economical foundation. “Overall debt is falling but student loan debt is increasing year-over-year and at a much faster rate,” chief executive David Stevens told The Washington Post. “[Young graduates] are already on the margin for being able to qualify for a mortgage. If you add on a

A problem with student loan debt is that students gain more debt because they are not able to pay off the student loans within the given time which also causes them to put certain life decisions on hold. According to Sophie Quinton debt is a problem for the recent college graduates because “There’s currently no way to get rid of federal student debt other than paying off the loans. while some borrowers are paying off their debts just fine, overall they are adding debt faster than they are shedding it”(Quinton). According to Jamaal Abdul-Alim stated that a “survey - titled Student Loan Debt: Who’s Paying the Price?- revealed a number of troubling statistics about the practical ways that student loans are impacting college graduates in their everyday lives. For instance the survey found that: 49

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).

College debt is quickly rising as more students pursue a postsecondary education. Tuition is growing at a rate higher than inflation, thus forcing many students to make up the gap between income and tuition through loans (Houle). However, cultural factors must be considered before a young adult makes a decision about higher education. The type of postsecondary education one pursues, if any, is determined by many circumstances including socioeconomic status, race, and family background. Therefore these same factors impact the amount of student loan debt one acquires. At a global standpoint, the United States is among the nations with the highest amount of college debt with more than 1.2 trillion dollars in outstanding student loan debt according to CNBC, Consumer News and Business Channel (Holland). Although the amount of student debt in each country varies, similar cultural factors impact all students.

Today, the number of people who have borrowed money to pay their expenses for college, has been rising. In addition, colleges have been increasing the amount charged on students who receive an education. An article states that “tuition is increasing at a rate double that of inflation”, for this reason, the amount of money a student has to pay back has been increasing (Webley). According to the article “Even if you don't have student loans, you should want them to be forgiven”, the author, Lisa Schmeiser, states that “Approximately 44 million people in the U.S. have borrowed for student loans... debt standing at approximately $1.3 trillion today”.

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.

Thousands of American University students are drowning in debt, furthermore statistics indicate student debt currently tops 1.3 trillion dollars and rising. Grads1st consider the unsettled debt currently exceeds outstanding mortgage and credit card debt.

Over the last decade student loan debt has risen substantially and is now one of the largest form of personal debt in America, totaling about one trillion dollars, with 71 percent of students who earn a bachelors degree graduating with debt, with the average amount of debt being $29,400.

In the United States, it is generally accepted that college (or any form of higher education for that matter) is a wise investment that each and every individual should strive for. Each and every year thousands of parents open college funds and future investment plans to ensure that once their child is of age he or she can participate in quality educational programs. While college attendance rates are at a positive all-time high, right behind it follows an astounding $1.3 trillion dollars in student loan debt. Let’s face it, college is expensive, and it’s only getting worse. Could the outstanding quantity of student loan debt be the next national crisis?

According to the Federal Reserve Bank of New York, student loans have quadrupled since 2004, to $1.2 trillion (Brown). This insurmountable debt is an astronomical problem for Americans today and more so, for future Americans. College tuition has been rising for the past 40 years and will continue to do so exponentially. In an asset management report done by J.P.Morgan in 2014, the firm projects the cost of private universities to be at roughly $90,000, and $40,000 for public four-year universities in the year of 2030 (Badkar). If the government remains dormant toward this issue, college students 20 years from now, will be burdened with an even larger amount of debt.

Today’s Federal debt is about $20 trillion which would make student loans a whopping one twentieth of the national debt. Upon further inspection though, the “Federal Debt Clock” claims that the Federal does not include things like state and local debt, agency debt, and programs like Social Security and Medicare. That is a lot of money that is unaccounted for. Even with all these programs taken out the Federal Debt per person is estimated to be

College is not quite as optional as it once used to be in the era of our parents and their parents. To get a job that will pay substantially more than with just a high school degree, it is becoming more and more common for high school graduates to go straight to college. With the price of college skyrocketing, it is extremely common to take out student loans (from the government or private institutions), all which come with interest. This paper will focus on the different aspects of student debt, including rates, how they compare with car and mortgage debt, forbearance and deferment, default and delinquency, and adverse selection and moral hazard.

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

Financial support has played an important role for college students, especially for university students, whose family could not support their education after they have graduated from high school. Due to this situation, students have to go through a lot of problems with their tuition fees to be able to continue with their education. They always need a large amount of money besides paying for the tuition but also for living, and students have to go through a lot of problems with their tuition fees in order to be able to finish their career on time and earn a better living in the future. Some students will choose to go to work part time while at school, so they can pay for their fees and their own expense, such as gas, foods, and clothing. On the other hand, most of students will choose to take out loans from somewhere else, such as the bank or federal loans. This way, students who choose to take out a loan could focus on their education without worrying about how to pay for their fees. It is very important for students to acknowledges and be aware of the different types of student loans, and all the requirements before students decide to obtain a loan. Because of the raise in tuition leads to the existence of the student loan debt is a burden that is a financial impact on lifestyle changes, such as postpone couples to get married, to have children, to buy a house and to save for retirement.