Generations of Debt The article, of the extreme student debt crisis, written by James B Steele and Lance Williams, is a disturbing truth fact. The student loan industry is not there to help the students get ahead. Its only goal is to line the pockets of private investors, banks and the federal government.
Jessie Suren and Albert Lord are two whose lives are at opposite ends of this crisis. Miss. Suren is a young woman who took out a loan to go to college, but unfortunately she didn’t get the job of her dreams. She is a college graduate who has to work two jobs to pay off her debt. On the other side of that coin, is Mr. Lord, A retired CEO with Sallie Mac who helps build a multibillion-dollar corporation off the blood and sweat of students.
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Americans with debt who are not capable of paying may even hide from collectors due to the extreme difficulty this places on them. The government will also garnish your wages and social security checks, making it extremely more difficult for Americans who can’t afford it, no matter their circumstances.
Student debt today is at it’s worse, as it doesn’t matter who you are, your circumstances, or your status; if you have a student loan debt, by default you can’t lose everything. The government will not let you file bankruptcy, as people like Sallie Mac made sure of by paying lobbyists millions of dollars. James P Steele and Lance Williams are absolutely correct in their opinion about the debt crisis. Student debt is way out of control and the private sector definitely, has monopolies over it all. The government would rather receive their 20% of the fee, than invest it in the future of a higher educated American. Yet, it is these fellow Americans, who will probably, one day, bring in a higher level of income in the future thereafter, which in return pays a higher level of taxes. The government is not looking out for the people that are the majority of America, the middle class that represents America, only that of the 1% of the wealth who can give immediate benefit and payment in the hands of the impatient and ignorant in our
Moreover, individual borrowers are not the only ones who face the consequences of the loan default. The federal government recovers around 80% of the total defaulted amount of student loans, losing billions of dollars each year. The latest data from the U.S. Department of Education indicates that student loan default rates have been rising. Official 2011 default rate is 10%. ("Comparison of FY 2011 2-Year Official Cohort Default Rates to Prior Two Official Calculations"). The New York Federal Reserve reported that as of March 31, 2013 outstanding student debt surpassed credit card debt and was approaching the $1 trillion mark (Quarterly Report on Household Debt and Credit). If student loan default rates stay unchanged, the federal government will lose $200,000,000,000 of taxpayers’ money over the next few decades because of student loan defaults. Below is the chart representing the outstanding credit card and student loan debt over the last ten years (Quarterly Report on Household Debt and Credit).
Many Americans are seeking an ideal presidential candidate for our next election; furthermore, many college students seek a candidate that has their best interest in mind, leading many to focus on Bernie Sanders and his ideas for an affordable education system. In the article, The Myth of the Student Loan Crisis, Nicole Allan and Derek Thomas focus the article on the risky investments of college and questioning the rising debt levels as a national crisis. While Allan and Davis claim the risk of college and mention rising debt levels as a national crisis; however, Allan and Davis use charts to support their stance while avoiding the issues Americans need to focus on, such as the rising cost of college, “justifiable debt”, and the cost of those not contributing to society.
According to Steven Goodman, in his article Why College Tuition Should Be Regulated, “two-thirds of American undergraduates are in debt” (Why 1), which is ridiculous considering the fact that they have not graduated yet. Even though he said that in 2011, it is very aware that it will continuously go up if no one puts a stop to it. Students even take out loans because their financial aid cannot cover up for their
Tuition and fees has extremely risen over the past years which makes it extremely difficult for both social economic groups to invest in a higher education for their families. Today’s college students borrow and accumulate more debt than previous years (The White House). For instance, “In 2010, graduates that borrowed money graduated with owing an average of more than $26,000”(The White House). As a result, President Obama has expanded federal support to help more families and students to afford higher education (The White House). Also, he believes that it is a shared responsibility of the federal government, states, colleges, and universities for making higher education
Garrahan, & John. (2014, May 02). Forgiving student loans won't fix crisis. Daily Journal Retrieved from http://search.proquest.com/docview/1520399845?accountid=27899
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 on the government to forgive their student loan debts so that through their spending the slowly recovering economy can finally return to its pre-2008 strength.
Employers consider a degree necessary for getting a job at their company. However, not many people can afford college. The solution is to take out loans, then college becomes affordable. These loans create a whole different issue, student loan debt. This can affect people their whole lifetime and has been happening for years upon years. But, in the more recent years America is starting to shed more light onto the issue and are becoming curious on why colleges charge twenty five thousand dollars, or more, for a year of education. Many different countries offer free college, but in America student loan debt keeps getting worse.
Student loan debt makes up a large portion of the debt in this country today. Many defaulted loans are the demise of high interest rates, poor resources to students in educating them on other avenues and corruption in the governmental departments that oversee education and financing. There are many contributing factors that lead to the inability to pay off student loans which need government reform to protect the borrower’s best interests.
When it comes to achieving success in the working industry and accomplishing a successful career an education is important. Getting a degree is essential to be successful. The issue is the higher the education the person wants the higher the cost is. Nowadays, not everyone can afford paying out of pocket for an education, which mean that students are forced to take out large amount of student loans to achieve that degree. Student debt is an ongoing problem, students are gaining oversized debts that most of the time if not ALL are defaulting and jeopardizing future credits. How much debt it too much debt? Everyone should have the liberty to
Children of the twenty first century spend nearly 13 years in school, preparing for what is college, one of the only ways to achieve the so-called “American Dream”. College is the best way to start an advanced career and go further than one possibly could if college degrees were not available, allowing people to achieve their view of the American Dream; whether it be large houses, shiny cars, multiple kids, or financial comfort, college is the stepping stone to achieve the American Dream. But all great things come with a price, college dragging along debt. Students who attend college struggle to find ways to pay for it, leading to applying for student loans. These loans a great short term, paying for the schooling at the moment but eventually the money adds up
Does the amount of student loan debt have an effect on the economy? If so would forgiving student loan debt help lower the national debt or would it just increase it? According to Mary Claire Fischer, a writer for Kiplinger’s Personal Finance magazine, “two-thirds of students who receive bachelor’s degrees leave college with an average debt of twenty-six thousand dollars” (Fischer). This means that the average student debt has doubled since 2007 (Ross 24). The total student loan debt is $1.2 trillion with $1 trillion being from federal student loans (Denhart). This debt accounts for six percent of our nation’s $16.7 trillion debt (Denhart). Since student loan debt is such a big part of the national debt, if the student defaults on their loan then the United States tax payer has to carry the burden of the loan (Denhart). Students who are graduating with debt do have a couple of different options that they can choose from. There is a six month grace period after graduation to allow the student time to find a job and programs to try to help eliminate debt. “The Consumer Financial Protection Bureau estimates that one-fourth of the American workforce may be eligible for repayment or loan forgiveness programs” (Atteberry n.p.). The problem with these programs however, is that they are hard to get into and stick with.
According to John T. Harvey, the rise in student loans and debt creates a drag on short-term economic activity and stunts long term economic growth. Currently, the total student debt is over 1 trillion. Graduates continue to emerge from college facing high costs and are entering what is still a poor job market. Many of these graduates will face under or unemployment, and will quickly fall into debt. This debt takes away the next generation’s ability to create demand, resulting in job loss and a stunt in economic growth. Without jobs, more people will fall into debt, creating a cycle that consistently deteriorates the economy. Finally, by denying many bright minds access to an education, the innovations meant to increase economic activity and make the quality of life better never actually happen. Rising tuition costs, which result in student loans and student debt, promise to grate at our economy and
In today 's society, many young adults pay thousands of dollars to go to college to be able to get a good job in the future. However, as society continues to move forward many young adults are leaving their campuses with expensive degrees, while also still struggling to get a job. One of the things contributing to the growing risk of going to college is how increasingly expensive it is to go to school. Things like student loan debt are a major contributor to that expense. Casey Bond stated how “The growth of student loan debt is being compared to the recent housing crisis because of the significant growth of subsidized lending,” The primary goal of college used to about gaining new knowledge and becoming a better member of society. However,
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.
Over the years the college national debt has grown to an enormous size, with Americans footing the bill of 1.3 trillion in outstanding college loans, according to the “St. Louis Federal Reserve”, from New Hampshire to Iowa, and across the nation, voters think students must be able to graduate from college without debt. (Frizell, 2015)