Negative Effects Of Student Loans

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“According to the New York Federal Reserve, U.S. student loan debt has soared to $1.3 trillion becoming the second highest consumer debt category, more than both credit cards and auto loans” (Fernandez, 2017). The national debt level for student loans has been rising at an alarming rate in recent years and many people have the notion of student loan debt potentially leading to the next financial crisis for the United States economy. Nevertheless, despite the sheer amount of student loan debt, many positive effects have been overlooked. The positive effects student loans have on our economy could be compared to that of a stone thrown into a lake causing change in many directions. Indeed, financial aid for students have expanding effects beyond the initial debt incurred – leading to a healthier economy rather than a financial crisis. Student loans have improved the United States economy by providing an opportunity for students to attend college and increase their employment opportunity, increased income for college graduates, increased consumer spending, and increased tax revenue for the U.S. government.
To begin with, student loans have provided many people with the opportunity to attend college and increase their employment opportunity after graduating. According to the student loan debt statistics there are more than forty-four million, or roughly seventy percent, of college students that currently have a student loan (Cloud, 2017). Without student loans, these students would have to forego any plans of seeking higher education until they were able to save enough money to pay for it themselves. Given a population of just above three hundred and twenty-five million people, over ten percent of Americans currently utilize student loans in pursuit of higher education (United States Census Bureau, 2017). Moreover, more than one-third of the United States’ working adults have obtained a bachelor’s degree or higher (Wilson, 2017). Not only would these students potentially not be able to attend college, but they would also face difficulties in being employed. Unemployment is one contributing statistic to determining whether the economy is thriving or struggling. According to Asoni and Sanandaji (2015), “college
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