Student Debt: The Great Recession In The United States

In present 2016, with the presidential elections coming up, one of the talked about problems is student debt. The U.S. currently owes over 1 trillion dollars in student debt and it is growing by the second (Collegedebt.com). Tuition rates are over the roof and how these politicians plan to act upon them is one of the major deal breakers for this election. Yet as tuition rates keep on soaring, people are questioning, how and when did it become this bad? The answer is simply three factors: The Great Recession, Privatization, and lastly the need for higher education.

The Great Recession was a shocking surprise to the American population when we realized the abrupt and sheer deterioration of housing prices and unemployment rates (Fieldhouse).

The post recovery was not as strong as it could have been, but due to the great help of Obama and Congress, we have managed to begin stabilizing the economy (Money.cnn.com). They implemented new policies like the American Recovery and Reinvestment Act which took out tax cuts in order to give help to troubled citizens and states, they also tried to balance the housing market, and reduce mortgage and foreclosure rates. The results were extremely positive as stated by Whitehouse.gov, “This all-out policy response has made a huge difference. Last Friday, we learned that real GDP…grew solidly for the third quarter in a row. Growth at an annual rate of 3.2 percent in the first quarter of 2010 is a dramatic turnaround from the decline of 6.4 percent that we had in the first quarter of last year. Likewise, in March we started adding jobs again. Employment rose by 160,000, and given the other data, we are hopeful that Friday’s April employment report will yield another positive reading.” Yet even though there was growth within the nation’s economy, the states were not getting enough money from the government and had to take out many budget cuts and one of the most affected budgets was the educational funds (Lumina 6). States would originally contribute reasonable amounts of money to schools and that would lead colleges and universities setting tuition rates lower due to most of the expenditures of housing/educating the student being already paid (Lumina 4). Later on as the Great Recession progressed, states were forced to cut down the budget thus making schools raise the price of higher education (Lumina