Student Debt Crisis Analysis

The student loan crisis is worse than ever and more people are leaving college thousands of dollars in debt before they even have a job or any type of income. With the rising cost of college and living expenses, people are taking out more student loans for higher amounts, leaving more people in an undesirable amount of debt and essentially trapping them. “There's currently no way to get rid of federal student debt other than paying off the loans.” (Quinton, Sophie, why you might be paying student loans till you retire). Because student loans are not like other loans they will not disappear if you declare bankruptcy, so the borrower is forced to pay them back even if it means you cannot afford to do so. There is not just one thing that is causing the student loan crisis this is a combination of many things that are being overlooked or ignored. We need to look into the reasoning to determine why this is happening, what problems it is causing and then come up with a solution that can stop the problem. Student loans are a great tool to use if you need financial help for college, but one must be careful and consider the consequences and understand what a student loan is and how to deal with them to make a responsible decision about their financial future.

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.

Children are taught young about the American dream and how exactly to obtain it. You go to school, work hard, receive an education, graduate, procure a job, get married, purchase a house and a car, have children, and then you tell the next generation to repeat. And if a young adult should deviate from the norm and decides not to go to college, then the only employment they could ever find is at some restaurant that offers minimum wages. However, as exaggerated as that hypothetical situation is, even myths can hold a form of truth because the truth of the matter is that to ever have a chance at prospering in America. But before an individual can become a student, they first have to be able to afford the cost; and for the average American, they

In 1976, the average cost to attend a four year public university was $2,175; today, the average cost to attend a four year public university is $25,000 (Snyder). This means it is 1150% more expensive to go to college in The United States today than it was 30 years ago. This obviously would create a problem on how we as people are going to pay for our higher education. Today college has become almost a necessity to have a satisfactory life, and with these rising prices some individuals believe student loans are the only option. There are many reasons as to why the prices have risen, but the one undeniable fact is that this has created a problem within our country. Which, is known as the student debt crisis, and it has been on the rise the past couple years. This problem is affecting people all around the United States, and is causing multitude of problems for them all because they wanted to pursue higher education. Wanting to better your opportunities by bettering yourself is not something that needs to be punished, and sadly that is what is happening. This problem is something that needs to be fixed for the sake of Americans and our economy, but will also take time and a multitude of steps to correct.

There is a critical financial trend in the United States: student debt is at an all-time high. For the first time in mid- 2013, student debt rose to 830 billion, surpassing the credit-card debt (Clemmitt). Many economists and scholars compare the student debt crisis to the housing bubble, which resulted in a nationwide recession 2008. In a senate hearing regarding the current student debt crisis, Illinois Attorney General Lisa Madigan said, “The warning signs are there, just like they were before the housing crisis, and congress needs to act before it is too late” (Bidwell). After graduation, many students find it difficult to repay their debt, due to the bleak job market. According to a report published on the financial website Smart money, ten percent student loans borrowers defaulted in 2010 (Clemmitt). The percent was larger for students that attended a for-profit educational institution, like a career college; fifteen percent of these students defaulted (Clemmitt). Although the default rates do not contribute to the increasing student debt, one can compare it to the mortgage crisis when people stopped paying their mortgages and the American economy crashed. This exemplifies the critical problem that the student debt bubble if burst; it can have devastating impacts on the vulnerable American economy. Three causes for the increase in student debt are due to recent trends in college attendance, the increase of for-profit colleges and the rise of tuition due to spending

The United States student loan debt crisis is worsening by the minute. According to analysts about two students who had taken out a sum of student loan debt default every minute. This default rate is setting the United States up for a major financial crisis. What is driving the nation deeper into the red is the greed of the loan servicers. Although not illegal, loan servicers direct students who appear as a troubled applicant to sketchy and costly loan repayment plans. A branch of what is now known as Sallie Mae is responsible for a majority of the problem, because their sister company Navient “services roughly $300 billion in loans taken out by 12 million borrowers.” (1)

Most of the student debts are a result of loans to fund their education. Student loans are significant for education funding because it is a form of investment. However, the students are normally left with huge debts after completing their studies and have to struggle financially to acknowledge the debt when it falls due. This has a negative impact on an economy as these students will minimally contribute towards their retirement savings due to the financial burden accelerated by the current high unemployment rate. It is also stated that the students’ delinquency and defaulting rates are high compared to other housing debts (Elliott & Nam, 2013). This is bound to have an adverse effect on economic growth, and the

How the Student Loan Debt Crisis Is Undermining the Economic and Social progress of American Graduates

College students in America are facing a loan crisis because colleges are too expensive. In fact they are so expensive that a lot of people can't go to them or are paying off student debt years after they graduate

National debt has always been a constantly occurring problem. This debt is a problem due to the fact that it limits economic growth. With low economic growth, there tends to be a lot of problems that occur. These struggles include high interest rates which leads to higher debt, low salaries for citizens, and fewer jobs are provided which connects to higher unemployment rates in America. However, America

A crisis looms in the American economy tethering directly to the accretion of student loan debt now surpassing one trillion dollars and worsening. In fact, bankruptcy attorneys nationwide have begun to witness potential clients with burdening student loan debt in recent years as never before.

In commonality to American society has been our ongoing debt crisis regarding college loans. Increasingly, achieving higher education has resulted in students to take a substantial amount of loans in order to attend a 4-year university. The United States has acquired debt crisis in recent years due to the massive $1.4 Trillion dollars acquired in student loans. Nations such as Sweden and Australia have similar lines as the United States; these countries have fixed their student loan issues by basing the payments on your earnings and allow halts in payments if earnings drop. These adaptations have allowed these countries to avoid having a crisis. Compared to the American model, which lacks functionality and efficiency, the U.S. expects full repayments in an unrealistic short amount of time. “The lengths of debt payments should align with life assets,” (Dynarski 1). Does this have the

Definition of the problem: Student debt has become a major problem for our college graduates to not only to start their career but also starting their lives living independently.

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

In the case of student loan debt crisis, radical change/action would be the act of rejecting what is usually sanctioned by society as a means of acquiring funds to pay for college and rejecting terms in which many currently default student loans were made. According to text, the Occupy movement first became educated on how the banking and collection systems deals with loans, the shelf life of loans held by banking systems, the banking and collection systems view of the debtor, the overall life cycle distressed debt and the true value of the transactions that occur between the banks and collection companies. Secondly, the movement delivered a public message concerning the debt crisis problem, which also included a realistic action plan on how