Student Loans Vs. Federal Student Loan

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”.

With the ever-increasing tuition and ever-tighten federal student aid, the number of students relying on student loan to fund a college education hits a historical peak. According to a survey conducted by an independent and nonprofit organization, two-thirds of college seniors graduated with loans in 2010, and each of them carried an average of $25,250 in debt. (Reed et. al., par. 2). My research question will focus on the profound effect of education debt on American college graduates’ lives, and my thesis statement will concentrate on the view that the education policymakers should improve financial aid programs and minimize the risks and adverse consequences of student loan borrowing.

After World War II and the establishment of Higher Education Act of 1965, the primary goal of equalizing educational opportunity to lower and middle income students became a national initiative (Mullhern et al. 2015). These initiative were provided through grants and financial aid. However, in recent years student loans have become an important part of the equation. Since the Great Recession in 2008, many states have not invested in higher education at pre-recession levels, which were already low from the previous recession (Mitchell, Palacious & Leachman). This has

Student loan debt relief is a controversial issue in America today. Student loan debt affects twelve million college students, roughly 60% of all college attendees, per year (Student Loan Debt Statistics). Student loan debt relief rose to the forefront of economic news during the financial market crash of 2008. The U.S. Government has developed a debt relief plan that extends payments over a 25-year period, with a full forgiveness of all remaining debt at the end of that 25-year term (Ensuring That Student Loans Are Affordable). During this repayment period, payments can be suspended during times of unemployment, giving hardship students a break from their student loan payments. Many people feel that student

A retrospective look might provide a clue as to how so many Americans landed in the whole “student loan” dilemma in the first place. As discussed in the America article “The Student Debt Crisis” as part of the plan to create a ‘Great Society’ President Lyndon B. Johnson signed into law The Higher Education Act of 1965. The act provided more funding to public colleges and universities, giving them more resources so that students would be able to afford college. Hence, the birth of the student loan (2015).

In order to be successful in the workforce, having a powerful career there are things needed like higher education. Graduating from college is essential to finding a successful job, since more jobs are making college degree a requirement, more people are going to college. The problem is the cost of going to college outweighs the earning from the career you obtain. Very little people are able to pay for college out of pocket. In 2014, 42% of undergraduates paid for college out of pocket (Sallie Mae). The result of this is that students seeking higher education are forced to take out loans. On average, college students borrows $25,000 to earn their degrees (Alexandria). I just don 't get the concept of college tuition or student loans. It

Ever since it was turned into a semi-private loan service, Sallie Mae used money to lobby its way in order to become an effective profit-generating machine that fed off the student’s monthly payment while the government just watched as the well-intentioned program went down the drain. In the beginning, Federal student loan started off with the intention of providing equal opportunity in the academic world. For that reason, President Johnson (D) signed the Higher Education Act in 1965 that offered guarantees of low interest, leniency on payments, and options when the student cannot afford to pay it back. In the next presidency, President Nixon (R) expanded the educational program to make it a semi-government program

The qualifications for the program are tough and federal loan forgiveness only applies to federal Direct Loans, not private student loans. If the graduate is lucky enough to land a public service job the graduate must realize that there is no guarantee that the employment will still be around in ten years since no one truly knows how the program will work or if it will work at all. Val Meyers, associate director for the Office of Financial Aid at Michigan State University comments are recorded in Susan Tompers’ article “My Apologies: Forgiving Student Debt is Tough”:

Student Loans: What They Are, What The Evolution of Student Loans Has Looked Like, and What The Current Policy Is.

The student loan debt total was about nine hundred and two million dollars to one trillion dollars in the United States in 2012; the federal student loan debt made up about eight hundred and sixty-four billion dollars of the total debt (Driscoll and Clapp). Many people in the United States that cannot afford college tuition and additional fees take student loans and/or federal grants. Student loans are different from federal grants in that the loans have to be paid back with interest, while federal grants do not have to be paid back. A federal grant is also known as financial aid. Students with lower income are less likely to attend college because of student loan debts. The government does provide some help, however, there are limits

In the U.S. students are encouraged to earn a college degree, but the cost of an education turns many away. “Driven by the allure of a decent salary with a college degree, Americans borrowed to go to school. Outstanding student debt doubled from 2005 to 2010, and by 2012 total student debt in the U.S. economy surpassed $1 trillion” (Mian, Sufi 167). There are plenty of opportunities to obtain funds for college, including one of the most common, student loans. A student loan is defined as “a common way to fund education, specifically college and graduate school, and they provide educational opportunities that you otherwise may not be able to afford” (Barr). Student debt is at an all-time high in America. Over half of all lower income

Alan Collinge did not mean to become the poster child for student loan debt injustice. He was an average American with an average American 's plan: get a student loan, go to school, get a good job, pay off student loan, get married, get house with white picket fence, have kids and grandkids, and die happy. After attaining three degrees in aerospace engineering, Collinge was left with a debt of approximately $50,000. He went to work at Caltech in 1998, and made a poor to middling salary of $35,000 a year. And, he began to repay his student loans. One day, Collinge realized he was going to be short a payment, called the bank to let them know, and was assured that everything was going to be fine. He continued his payments the next month, only now he was receiving statements that every payment he made after that one shorted payment had a late charge attached to it. When Collinge called to have the error rectified, he found out that 1) he did not have a federal student loan, but a loan through a for-profit company and, 2) the company was not going to remove the late charges. This was the tip of a very large iceberg that was about to sink Collinge 's life plan, and the beginning of a story that is all too common among American college graduates, especially since 9/11. It turns out, debt is big business, and corporations have former students by the purse strings.

Student loans can be a resource part of our culture capital. Student loans are widely used in the United States. For the project, student loans were explained more in depth. It is important to understand some key terms and what they mean for student loans. When students are thinking about furthering their education they need to know the different from a grant, scholarship, work-study, and the two types of loans that come with federal funds. Direct subsidized loans are based on financial need and the interest is paid by the board of education. Direct unsubsidized loans are not based on financial need, but the student will need to pay the interest rate while attending school.

As Young teenagers become adults and start College, one issue that doesn’t seem as a big deal at the moment for many students are student loans. Young college students who don’t have the money, don’t have enough scholarship money, or family who doesn’t have the money to pay, will apply for student loans each year. They amount the student receives can vary depending on the college and what the student has achieved academically. Though interest rates are low with subsidized being 4.29% and unsubsidized being 5.84% ("Federal Student Aid" Interest rates and Fees), student loans still have a huge effect on college students once they graduate. One college graduate’s story helps explain the struggles for most students:

Most parents want to pay for their kids’ college. But there are those who are stuck in the middle. This means that parents who try to apply for financial aid find themselves unable to qualify for the aid and they are also unable to pay out of pocket.