Some reporters and commentators have dubbed student debt “the next subprime.” This comparison certainly grabs a reader’s attention, and it may cause readers to ask: Does student loan debt in the United States have the potential to cause a similar amount of financial damage as the mortgage crisis?” What this means is that student loans are increasing so rapidly that they have managed to exceed credit card debt and is increasing at an uncontrollable rate. I also believe it’s interesting when they state, “A higher rate indicates that more loans are becoming seriously delinquent and is an early indicator of potentially greater credit losses. The rate of new serious delinquencies for student loans has been relatively constant since 2006 at around …show more content…
Balaji Rajan, president and CEO of Ceannate Corp., leading business process outsourcing firm focused entirely on the students and institutions in the post-secondary education sector (Rajan). assets that a possible solution lies on the hands of Congress. If Congress’s efforts succeed on pushing towards reauthorizing the Higher Education Act and strengthen student loan policies, we may have a stop to the debt issue.. First and foremost, Congress should consider offering college students two federal loans at two different interest rates. The loan for education-related expenses, such as tuition and textbooks , would carry the lower rate. The loan for living expenses would carry the higher rate. Neither loan could be used for luxury spending (Rajan). That would be extremely helpful for many students that are tempted to spend their money on personal stuff other than using it toward their education. According to Rajan the reason behind this proposal may be clear but compelling. Students must know how to distinguish between the extras and the essentials before they get money from a lender. The Higher Education system may be able to promote responsible financial behavior and prevent student debt from spiraling out of control. Rajan goes on and states, “Simply lowering interest rates across the boards , as some have suggested, would not discourage students from spending wastefully and might …show more content…
According to this research by Lindsey students who enroll “with no prior college credits should be able to complete the degree program in three years at a total cost of $13,000 to $15,000”. That is less than half the price of a traditional degree at a Texas public four-year university. Students who enroll having already met their general education requirements can complete the degree in two years. Those enrolling with “90 credit hours and no credential” can finish their degree “in one year for $4,500 to $6,000.” (Lindsay). The significance in this finding is fascinating. If many colleges across the nation use this idea it would save every student thousands of dollars. And also provide an opportunity for those to attend college as a first generation as
Martin and Lehren’s article “A Generation Hounded by the Soaring Cost of College” addresses the issue faced by current and former college students dealing with large amounts of debt due to student loans. The article presents the reader with stories of former college students who have either graduated or dropped out, and their struggle to pay off their student loans. The article also talks about issues such as students not being informed about high amounts of student loans and why student debts have increased. Martin and Lehren also make the issue of student debt more intimidating by giving examples of high amounts of student loans students have had. The article gives a very hard reality check to anyone reading as to how bad the problem of student debt is.
In the argument, Debate on Student Loan Debt Doesn’t Go Far Enough, author Robert Applebaum, graduate of Fodham University School of Law, asserts that excessive student loan debt should be forgiven after a reasonable repayment period and suggests this would stimulate the economy because former students would have more money to spend(Debate). He backs up this claim by introducing the Student Loan Forgiveness Act of 2012, contending that education should be a right that people of all classes can benefit from, and addressing both the individual and the economic drawbacks of student debt in the middle and working classes(Debate). Applebaum
Recent studies show that the number of individuals who default on their student loans has been steadily increasing as well. Statistics from the Institute for Higher Education Policy (IHEP) show that between 2004 and 2009 only 37% of federal student loan borrowers were able to make uninterrupted payments; it is an annual average of 7.4% (Cunningham, and Kienzl). According to IHEP, for every one borrower who defaulted, two ...
In recent years, there has been a tremendous increase in student enrollment in higher education after high school effecting the need for financial aid for all students. Education has become a growing part in America where more students want to better their lives with a college education. However, the cost of college tuition has increased and more students find themselves struggling to pay off the enormous tuition rates. In a recent study by the Consumer Financial Protection Bureau, student debt has reached $1 trillion in federal loan debt. Student loan debt has crippled the economy and students are struggling to pay off federal loans. In order to help students with the high tuition rates of college the government and universities offer
Many people would agree that our country’s young adults have and continue to incur a lifetime of debt by enrolling in college. It’s become an almost acceptable understanding that if you plan to attend college, you might as well expect to graduate with an enormous amount of debt. Robin Wilson, a reporter for the “Chronicle of Higher Education,” and author of “A Lifetime of Student Debt? Not Likely” suggests student loans are very real and can be life altering.
Mark Kantrowitz indicates in his article, Why the Student Loan Crisis Is Even Worse Than People Think, that “Student loan debt is increasing because government grants and support for postsecondary education have failed to keep pace with increases in college costs”(Why 1). This means that the government no longer covers for college tuition fees. College graduates are 20% more likely to work at a job that is outside of their major by the debt they are in. Kantrowitz also mentions that “students who borrow to attend college, it appears that more than a quarter (27.2%) of them are graduating with excessive debt” (Why 1). In reality, leads to student saying that the financial cost was worthless, ending up with a job that is especially not what they went to school
For the past decade, The United States has stressed the importance of college education, to those seeking employment, and better careers. For most people, college is the logical next step in education, as it provides a working knowledge of a desired field and opens the door to many opportunities, but college has become increasingly more expensive as time goes on. Many people feel that college is no longer an option financially. Even with financial aid and scholarships, the cost of a college education can still be very taxing. This is due to massive price increase across the boards, but the main issue on most people’s minds is the debt that will be acquired from higher education.
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.
It is a norm and expectation in society today for students to pursue higher education after graduating from high school. College tuition is on the rise, and a lot of students have difficulty paying for their tuitions. To pay for their tuitions, most students have to take out loans and at the end of four years, those students end up in debt. Student loan debts are at an all time high with so many people graduating from college, and having difficulties finding jobs in their career fields, so they have difficulties paying off their student loans and, they also don’t have a full understanding of the term of the loans and their options if they are unable to repay.
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
In that year, the number of college graduates was only 432,058 (Sourmaidis) and ever since the demand continually increased as did price. This trend allowed for the student loan crisis to occur, which is a problem we face today. As of 2016, American students have accrued a massive 1.3 trillion in student loan debt. Just 10 years ago, the nation’s balance was only $447 billion (Clements). This ever-present cumulative burden has caused many post graduate Americans to delay important life events such as marriage, homeownership and children because of this substantial encumbrance (Clements).
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.
Over the past decade, it has become evident to the students of the United States that in order to attain a well paying job they must seek a higher education. The higher education, usually a college or university, is practically required in order to succeed. To be able to attend these schools and receive a degree in a specific field it means money, and often a lot of it. For students, the need for a degree is strong, but the cost of going to college may stand in the way of a successful future. Each year the expense of college rises, resulting in the need for students to take out loans. Many students expect to immediately get a job after graduation, however, in more recent years the chances for college graduates to get a well paying job isn’t nearly as high as it used to be. Because students can no longer depend on getting a job fresh out of college, it has become harder to repay the loans. Without a steady income, these individuals have gone into debt and frequently default loans. If nothing is done to stop colleges and universities from increasing the cost of attending their school, the amount of time it takes for students to pay off their loans will become longer and longer. The extreme expenses to attend a college or university may leave a student in financial distress: which may ultimately lead to hardship in creating a living for them and affect the country’s economy.
“New Data Confirm Troubling Student Loan Default Problems.” Project on Student Debt: Home. N.p., n.d. Web. 29 Oct. 2013. .
...ggled with high debt burdens that adversely impedes their lives. Also, it will threaten to the affordability and success of higher education in the US. I believe that through my research paper in can prompt American college students to make wise and informed decision on financing higher education. Moreover, it will make the education policymakers aware that the rising education debt has a serious implication for college access and affordability, prompting them to decrease total student loan debt amounts by holding down college tuition and increasing the federal student aids.