Will Free Colleges Solve The Student Debt Crisis?

American students owe a total of 1.3 trillion dollars in student loans, and about 44.2 million students are in debt. Colleges all over the United States require a tuition for students to attend, which is detrimental to families with low incomes. As a result, students from low income families opt to not attend college. A solution for this problem would be to institute tuition free colleges. Advocates for free colleges state that it would enable students to achieve their dreams, regardless of their monetary situation. Proponents against free colleges say that the public would have to be taxed too much to cover the expenses. College should be free because it would help the country economically, allow students to be more focussed, and it would let students to pursue any career that they would like.

During one of his campaign programs, Presidential-candidate Bernie Sanders stood before a thousand applauding and cheering people. This man just announced, as hopeful future President of the United States, that he planned to make college free for every US citizen. Many young adults favor Bernie Sanders, and other political leaders, idea of free tuition because they believe that it will open more doors for them and allow them to not worry about the burden of student loans. However, there are many reasons that regulating free college education could hurt our society and economy that people don’t often realize. College education should not be free because it would raise taxes, it would devalue the worth of a college degree, and it would pave the way for more welfare dependency.

When we think about college and a college education, it seems as though our first initial thought is the student loans and debt that can result in achieving a college degree. Looking back, student debt has risen drastically and has made it extremely stressful for students and families. Many people go through their entire life in debt, especially from being a student. Student debt has always existed; however, now, it is so extreme, almost all students who attend college find themselves deep in debt, and must continue paying off their debt many years after they graduate. For the past two decades, student debt has risen, illustrating how big this social problem has become. The reason student debt is a significant social problem is because of how much it can effect a person’s life, and their families lives, that can carry over to their future. Although there were many things that led up to and impacted the drastic student debt that is now being faced by many students around the world, the corporation Sallie Mae, was the essential factor in why student debt has skyrocketed to unreasonable proportions. Sallie Mae provided the first type of corporation that changed its focus from helping students, to helping themselves. The history and scope of the student debt can help us understand that the corporation, Sallie Mae, was the main cause of this problem.

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.

In the United States, it is generally accepted that college (or any form of higher education for that matter) is a wise investment that each and every individual should strive for. Each and every year thousands of parents open college funds and future investment plans to ensure that once their child is of age he or she can participate in quality educational programs. While college attendance rates are at a positive all-time high, right behind it follows an astounding $1.3 trillion dollars in student loan debt. Let’s face it, college is expensive, and it’s only getting worse. Could the outstanding quantity of student loan debt be the next national crisis?

College debt has risen significantly since “The Great Recession” in 2009. Due to the high college fees, students are faced with lifelong debt. If the rise continues, only the rich will be able to obtain a higher education, resulting in American education to take several steps backwards instead of improving. Although many have tried to fix college debt problem, it has mostly gone unnoticed. Specifically targeting the nation’s youth, college debt is destroying the chances of the lasting effects on the economy from fully recovering.

College debt is becoming more of a drastic problem in the United States with the rising costs of college tuition. In “Why the Student Loan Crisis Is Even Worse Than People Think” Mark Kantrowitz expresses how the issue of student debt in America is to be blamed by the government’s lack of action. In “Is College Doomed?” Graeme Wood expresses the benefits of the new and innovative univeristy Minerva. A perk about this university is that it includes the cheaper tuition than other ivy league schools because of its lack of all the componenets of an average university. The government needs to be more involved in preventing future college students from graduating with overwhelming debt.

Key informant interviewee Natalia Abrams, stated that “this is a time where media and politicians are talking about student loan debt but they are only focusing on policy for the new college student, but there needs to be a policy for the 43 million existing borrowers.” There are two separate policy issues that need to be analyzed in order to address the student loan debt crisis. Research shows that there is a difference among default rates based on race and socio economic status. These differences left unchecked can wreak social and economic havoc on society. While student loan debt crisis may not be a crisis for all, the danger is the growing amount of debt that a significant fraction of borrowers are currently saddled with that is preventing

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.

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?

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

Student Loan Debt Isn’t A Myth,” it describes how student loans are a huge crisis, and the

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.

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 an aspiring college student doesn’t have the necessary funds to attend school, there is another option they could use to pay for school. Student loans are a popular choice so that the student can pay for school. While this may seem like a great option for affording school, it can be a devil in disguise for many. The New York Times reports that Americans owe over 1.4 trillion dollars in student loan debt (Kelly 1). This happens when a college student takes loans with the belief that the college degree they get will help them achieve a higher salary which will in turn will help them pay off their debt. This often isn’t the case. A student takes the loans and attends school, but does not receive the salary that they were hoping to acquire from attending school. A standard payment plan for students is to pay off their debt in ten years, but according to a study conducted by US News, the average bachelor degree holder takes twenty-one years to pay off (Bidwell 1). This is a common occurrence as well, a report conducted by The Institute for Collee Access and Success shows that in 2012, seventy-one percent of college graduates had student debt (Serrato 1). The current system that the government offers to help those struggling to afford a secondary education is a flawed program that needs restructuring.