Pros And Cons Of Student Loan

1256 WordsAug 7, 20156 Pages
Applebaum laments that from the student loan industry point of view, the student debt is there to help the loan providers amass funds from the youngest, economically vulnerable and financially unstable of which graduates form the majority. The loans have come with immense opportunity cost as the “educated poor” are not able to buy homes, invest or innovate, start businesses or engage in economically viable activities while the few up the echelons of power are benefiting. Tuition rates have escalated due to the flooding of student loans which allow people to pursue any degrees; further decimating the job market. The loans lack basic consumer protections, eliminating the risk of lenders who issue the loans. Mangis (2012) discusses the pros and cons of student loan forgiveness. As a major advantage of the program, students will be relieved the burden of paying the loans in full besides checking interest rates. This will lower monthly loan repayments and increasing chances of affordability of student loans. However, the Obama Student Loan Forgiveness just applies to federal loans and no incentive is provided for private loans. According to Wolfers (2011), the program will have immediate stimulative impact to the economy by increasing the consumers’ disposable income, consequently leading to hiking in consumer spending, more employment opportunities, businesses increasing their hiring and emergence of a new period of innovation, economic prosperity, and entrepreneurial
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