U.s. Federal Family Education Loan

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.

The decision to attend college for most individuals yield promise of advancement in being able to further one’s learning, and assists with developing a marketable educational portfolio from an institution of reputed academia. However, with the pursuit of obtaining a college degree from a university, there are augmented concerns with student loans and repayment issues. In electing to secure a student loan for college, prospective students or parents should realistically, forecast or measure probable (anticipated) student debt. In particularly, with students aspiring to attend college, several organizations or subsidiaries, and for-profit institutions cash in on unknowledgeable hopefuls contributing to the student loan debt dilemma/crisis (or student debt). The college costs and financial constraints for student borrowing, if ill-prepared will substantially effect students in pre-graduate or even post-grad status. The findings suggest that there is eminence of the possibility of default, with repayment behavior which effects long-term financial outlook. In examining the data on cumulative debt, number and characteristics of borrowers, types of institutions, and repayment dynamics there are unsettles that arise in the gest of student borrowing.

Thousands of American University students are drowning in debt, furthermore statistics indicate student debt currently tops 1.3 trillion dollars and rising. Grads1st consider the unsettled debt currently exceeds outstanding mortgage and credit card debt.

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

With student loan debt on the rise and more borrowers struggling to make their monthly payments, many people want President Trump to take the reins and keep some of his campaign promises. In October of 2016, then Republican presidential candidate Donald Trump proposed new student loan guidelines that would cap total repayments at around 12.5 percent of a student loan holder’s income for 15 years from their graduation date. After 15 years, the proposal would forgive the rest of the student loan holder’s debt.

As the demand for workers with college degrees increases the pile of debt students may graduate with gets bigger and bigger. This problem is America’s next sizeable financial crisis, but this crisis however is avoidable. Student loan debt is a financial bubble waiting to blow up just as the housing market collapse did in 2007, which the country is only just now starting to see signs of recovery from. The cost of a four-year degree has seen increases that surpass inflation and health care costs. Likewise, the amount of student loan debt is now greater than both auto loans and credit card debt. So, the question most frequently asked is, how has this happened?

A decade ago, student loans barely existed. Today, however, American students borrow up to couple million dollars a year to attend college. An entire generation is burdened with debt, and affected by the modern phenomena known as the “student debt crisis.” In recent years, student loan borrowing rates have risen notably, leading to concern about the public financial risks associated with the financial challenges faced by many students. Of late, the United States government has given out about $170 billion in financial aid annually in an effort to encourage students to attend postsecondary education. Such funding are usually supported by research that consistently finds positive and growing average economic benefits of

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

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

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

The biggest question asked about student loans is, “How did it get this bad?” It started back in October 1957 when the satellite, Sputnik, went up. After that, students worried that they might not be as intelligent to go up against Russian rocket scientists. So, President Eisenhower made a low-interest college loan program through the National Defense Education Act of 1958. The money for the loan came straight from the government. Years went on, and in 1965 Lyndon Johnson’s legislation “war on poverty”, came into play. The student loans increased due to the president’s Great Society initiatives.

In addition these students will have problems in accessing loans due to poor ratings from the credit reference bureaus, and hence have difficulties in purchasing assets such as houses and vehicles, starting businesses, and venturing into entrepreneurship. Moreover, the U.S. economy depends on high consumption, and this will force the government to depend on the foreign lenders because its citizens will lack disposable incomes. However, Valenti, Edelman, and Ostern (2013) observe that student defaults will not result in a debt crisis. This is because at least ninety percent of student loans are guaranteed by the government. Moreover, the student loan size is at tenth percent compared to the mortgage market. The objective of this paper is to critically examine the long term and short term impact of

Students on average have more than 25000 dollars in student loan debt they have to pay back because of this debt; The incredible amount of debt creates issues of students struggling to pay that money back.In order for students

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

Many borrowers try their best to repay their student loans but encounter unfair policies designed to extend their repayment periods. In April, we conducted an online survey to explore the “borrower experience” during repayment. We learned that borrowers are doing all or the right things: they borrowed money to get an education necessary to open doors to opportunities. When they entered repayment, however, the frustration,