What Trump's Budget Could Mean For Student Budget Analysis

In her essay “Is Forgiving Student Loan Debt a Good Idea,” Kayla Webley argues that forgiving debt could be a bad idea. Her article was exceptionally influential in demonstrating the way that the payment would put the nation in a bad position. It would send the wrong message to individuals who attended a university and the individuals who didn’t. Webley touched on Robert Applebaum’s petition to provide a one-time bailout of student loan debt.

Student loan debt affects college students all over the United States. Today students are having to take out loans in order to pay for all of their college expenses. It can be a pain to deal with the hassle of paying back the loans. The problems with student loans include causing students to go into debt that they are not able to pay them off in the given time which makes them put major life decisions on hold, and the debt stay with the student even through bankruptcy. A solution that would solve these problems is the idea of debt forgiveness which is the idea that the government will get rid of all the loan debt for college graduates.

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.

The last critical view of student loan debt relief deals with the lending institutions themselves. Banking institutions originally offered student loans that were to be repaid within a 10-year period. The new student loan debt relief plan extends this repayment period to 25 years, and this will create a hardship on the banks that were the original lenders. Since the recovery time will be much greater for these debts, these banks will have less available funds for future loans. Many feel that decreased lending power from the banking institutions may cause more stress on our economy in the long run. A large part of economic development rests in the ability of banks to keep loaning money, and if cash flow from loan repayment slows, it can take a toll in future lending (Keeton).

Americans have amassed more than $1.3 trillion of student loan debt (Clements). A lot of graduates are postponing life events like having kids, buying a house, to deal with the debt. About 14% of student are in default. Default means failing to make payments on your loan as scheduled. Defaults usually results in larger loan balances. With this upcoming election, it 's crucial for candidates to address student loan debt and their solutions. As a potential voter, it’s important I select the candidate that will benefits me and get rid of my loan debt.

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”:

Attention Step: Haley Edwards, author of the article titled “But Can America Afford This Approach to Solving Student Debt?”, from the Time magazine, published November 30, 2015, tells a story of a woman named Allison Minks, who owes an amount of $99,326 in federal student loans. Mink is a 35-year-old mother of two and her full-time job as a counselor at a nonprofit clinic does not begin to cover her student loan debt. Tired of being in debt, Mink went searching for a solution and she found a program that says if she works in public service, she can get loan forgiveness after just 10 years. In other words, because of this program, Minks now pays an affordable amount each month and she’ll be scot-free before she is 45. But, Mink is only covered

In the article “Is forgiving student loan debt a good idea” by Kayla Webley, a writer for Time, Webley feels that from a human standpoint forgiving student debt holds some appeal (2). Kayla Webley refers to Robert Applebaum who started a petition in 2009 with a petition of nearly 670,000 signatures. The comments from persons posting the petition are quoted as “guessing this will never happen but it can’t hurt to sign on” (1). Burdened with an estimated $88,000 in debt, Applebaum’s proposal is to provide a one-time bailout, of student loan debt-as a way to stimulate the still limp economy (2). Webley goes on to explain that such a plan has a problem. The problem being is that with an educational bailout most borrowers who can and should pay off their student loan would take this bailout, along with the students who really can not afford their loan payments and need the relief from their student loans. In Webley’s words “If forgiveness from a bailout was offered, who wouldn’t take the handout (3).

Over his time as President, Barack Obama has changed the student loan experience tremendously. A new law passed in the same legislation that passed Obamacare allowed the Department of Education to be a direct lender of student loans and eliminated the subsidy program, where the government would hand out subsidies to banks, like Bank of America, who would then grant student loans (Altman, Edwards, & Thompson, 2015). In simpler terms, the government cut out the middle man. While the general public did not see these changes as dramatic, the Department of Education now had the power to make a new rule book for student loans; they had the power to decide how loans are disbursed, repaid, and forgiven, without passing laws through Congress (Altman,

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

If the students pursue his/her career in the public service they can even be qualified for forgiveness after 10 years or 120 payments, and not 20 or 25 years. Making it a very promising program, the Obama Student Loan Forgiveness act is still controversial, because the students who study on behalf of other workers who pay taxes since day 1 from employment isn’t

PSLF, or the Public Service Loan Forgiveness, is another key tool in combatting student loan debt (Altman, Edwards, & Thompson, 2015). If a borrower is making payments under an IDR plan and is working full-time in public service, whether the government or a registered non-profit, they can sign up for loan forgiveness after only ten years (Altman, Edwards, & Thompson, 2015). While this applies only to those with loans directly from the federal government, those with federally guaranteed can also reap the benefits if they reconsolidate their loans (Altman, Edwards, & Thompson, 2015).

It’s extremely important to understand that certain steps need to be taken to qualify for this program. Many borrowers wrongfully believe that by just working in the public sector, their loans will be forgiven in ten years. This is unfortunately not the case, as many borrowers do not have the right loan types, or are not in the correct repayment plan. Make sure you take the necessary steps to make your payments count!

Making higher education available to every student was President LBJ’s one of the top priorities. However, this policy has tremendously backfired, as student debt, instead of eroding inequality has fueled the further growth of socioeconomic inequality. Through the government-sponsored student loan program, taxpayers took the risk, bankers reaped the reward. Since the banks had no liability due to government backing, they started charging the college students high interest rate that would be nearly impossible for the debtors to pay back. While, this vicious policy was slightly altered during President Clinton’s era to hold the banks more accountable, it was not until after the crisis of Great Recession when major steps were taken. After the great recession, the government bought out the previous government-backed loans and passed laws to let the private banks sponsor their own private loan without the government back. However, this step was taken too late to avoid economic calamity. By that time, student loan has become more than one trillion dollars, surpassing both auto loans and credit card loans of the United

As students approach their senior year of high school, they are no longer just pressured to look into universities, but how they will pay off their loans for those universities as well. The problem lies in rising tuition costs; college is expensive as it is, yet the price of attendance continues to rise. This has pushed graduates and future-graduates to urge the government for a policy that would pay for prospective students’ loans. However, this would prove too costly and would be similar to the Bank Bailout of 2008. As a result, the resolution is that the student loans of those with high, accredited academic performances - and in need of financial aid - should be forgiven by the government.