Summary: The Impact Of Student Loans

An education is one of the most important tools a person can acquire. It gives them the skills and abilities to obtain a job, earn a wage, and then use that wage to better their lives and the lives of their loved ones. However, due to the seemingly exponential increase in the costs of obtaining a college degree, students are either being driven away entirely from earning a degree or taking out student loans which cripple their financial prospects well after graduation. Without question, the increasing national student loan debt is one of the most pressing economic issues the United States is dealing with, as students who are debt ridden are not able to consume and invest in the economy. Therefore, many politicians and students are calling

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.

Economic impact from rising student loan debt is being felt throughout the United States. According to research performed by the Pew Research Center and Rutgers, between 25-40% of 20- and 30-year-olds are delaying large purchases such as homes and cars (Daniels). The delay of such

As of 2016, the average college graduate owes thirty-seven thousand dollars in loans (Glum). As a whole, Americans owe a grand total of 1.3 trillion dollars. These are figures that grow every year, and worse, the number of people who are defaulting on their payments grows as well. The issue of the student loan crisis is serious, which is why potential solutions are now being discussed. Presidential candidates for the election of 2016 have discussed solutions that range from Hillary Clinton’s debt-free college plan to Bernie Sanders’ free tuition plan funded by taxing Wall Street, while numerous scholars and business intellectuals have suggested amending the bankruptcy code to allow for discharging student loans as a solution to the crisis (Josuweit). In this essay, I will primarily discuss the numerous but limited ways amending the bankruptcy code can alleviate the crisis, and then I will offer alternate solutions to supplement the aforementioned solution.

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

“As of early 2012, borrowers in their 30s have a delinquency rate (more than 90 days past due) of about 6%, while borrowers in their 40s have a delinquency rate double that, at about 12 percent. Borrowers in their 50s have a delinquency rate of 9.4% and those over 60 have a delinquency rate of 9.5%” (qtd. in asa.org, “Student Loan Debt Statistics”). With bad credit, it is unlikely to get an approved loan or mortgage from a bank, pass a credit check from a landlord, or look appealing to an employer. Student loans has created a devastating trap for individuals striving to better their lives; unpaid private loans are inherited in the borrower's next generation,

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:

Many students are uneducated about student loans. When I say uneducated I mean that they have no idea what type of loan is best for them, how much they need to borrow, or where to get the loan. There are many resources out there about student loans, but there are not any requirements to review them before taking out a loan. Students are not required to have any knowledge about how the loans work. Students need to have the correct knowledge when applying for a loan, otherwise they may end up with too much debt or the wrong type of loan. A student should not start off their life outside of college in unnecessary debt.

Tuition and student debt at colleges and universities in America have been rising far more quickly than inflation for over four decades. This is a trend that will continue without intervention. Student debt drastically affects students’ lives and decisions from getting married, to buying home, or to starting a business. The amount of debt held by students after graduating not only negatively affects the individual, but the economy as well. Loads of economic activity is currently halted by students working to pay off their loans. This is a consequential problem and the increasing number of student debt in America must be addressed.

Throughout the United States, student loans have been show to drag this economy down. Student loans have been a big problem through many of the years. It has been showing a trend and it is raising and exceeding many of the debt types each year. Many problems that students that have loans cause are, “ 20 percent of respondents indicated they cannot get a loan for other items, are unable to purchase a home, and student loan debt negatively impacts their credit. 18 percent of individuals indicated they are living paycheck to paycheck, “drowning” in debt, and have a large debt load. 13 percent indicated they have a lower quality of life and are unable to afford the extra things. 12 percent indicated they are unable to save for their retirement or their children’s education and feel less secure.” Students that have

It is no big secret that, in America today, most high-paying jobs require a college degree. Thomas C. Frohlich of USA Today stated that “graduating from college is a prerequisite for the vast majority of high-paying jobs”(2013). With the cost of a college degree increasing in unison with demand, few can earn a degree without the help of student loans. The American Student Assistance website reports that of the twenty million students enrolled in college, about sixty percent are attending with the help of student loans (2014). Obviously, student loan debt affects the individuals that obtain them. However, it also has severe effects upon the nation’s economy.

These loans are a growing crisis, having “quadrupled since 2004 to just under $1.2 trillion” (Gorman). At the projected rate, the student debt crisis will continue to rise if the focus of funding higher education remains on loans and not federal or state grants. Without reform on policies that help decrease college prices, the student loan debt crisis will continue to grow and further disadvantage the socioeconomic standing of people who seek the most financial aid.

Over the preceding few years, there has been a swift surge in the level of student debt in the United States. Student debt has now exceeded credit card debt in order to become the second largest volume of household debt only lagging to mortgage debt. (Figure One) The idiosyncrasy that makes student debt stand out from other types of debt and liabilities is the fact that it cannot be resolved via bankruptcy. A consequence of this is the financial burden that an individual will have until the burden is repaid. This financial burden will not only affect individual economic outlook but also on the whole United States economy. Currently, more than forty million people in the U.S have student debt that totals $1 trillion. (Dynarski) This upsurge

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

Initially, 40 million Americans are paying off their student loans. This affects mostly the younger households trying to pay about $35,000 in loans; in addition, to rent, car, food, among other. According to the U.S. Department of Education, about seven million Americans in the past year have failed to pay their federal student loan. It is necessary that student loans forgiveness or affordable tuition programs become priorities in the next election or else the next generations will be enchained to a life debt in