Student Debt Crisis Essay

How to deal with Student Debt crisis?

Is there a way to eliminate student debt? Student loan is becoming a serious problem nowadays. A lot of college dropouts are buried under thousands of dollars of student loan. Some believes student debt crisis is rising due to high tuition, while colleges and universities blame high tuition on insufficient state support. Rising student debt is affecting people’s health, and it is delaying their further higher education. Student debt is an issue affecting Americans of all ages, so to solve this crisis the interest rates should be lowered, federal and state government should contribute more to lower tuitions and employers should somewhat participate in student loan repayments.

Many debtors

pay small affordable amount each month so they can pay bills and afford necessities, but paying that amount isn’t enough to keep up with compounding interest. Government and private lenders are making a lot of profit on student loans. The interest rates on loans should be lowered, and the student loans with low interest should be given to all students regardless of their credit worthiness. Lowering the rates would encourage more and more people to go get a college degree. In addition to lowering the rates government should give colleges better tools to decrease the student debt, such as, reasonable financial aid for students based on their educational status and academic major. Colleges should clearly explain the distinction between loans and grants. They should educate students about debt and future loan payments while they are in college, so they are prepared after graduation with a payment plan in their mind.

Student debt is rising rapidly.

In 2016 total student debt was around 1.3 trillion dollars-up 350 percent since 2005. More and more students are attending colleges than ever before. A while back student loans were only given to students with low family income or to students studying important subjects, but federal government is lending money to almost everyone. A lot of students are borrowing money from banks and private lenders. Students don’t have any other choice but to borrow money because if high tuition and fees. Many believe state governments aren’t supporting public universities and colleges like they should have. Tom price quoted Barmark Nassitian, a federal policy dictator, in his article about student debt. Barmark says,” The states are gradually disinvesting from public higher education, and that disinvestment is being shifted to students in form of larger tuition (967)”. The funds that were spending on higher education has been devour due to tax cuts and more spending on health care. Many students drop out of college and have difficulties paying their student debt while working a low income jobs. Our government should do something to get this crisis under control. Some kind of aid should be given to families earning less than $60,000 a year. The government shouldn’t have to pay entire tuition, but they have to contribute more then what they are contributing right now. Federal government doesn’t have to provide the funding all by themselves. States should

help, and students should contribute by working part-time while they are in school. Students who would benefits from these actions should at least maintain a 2.5 GPA.

U.S.

Rep. Rodney Davis introduced a bill that would help debtors to pay their student loans easily. It’s called Employer Participation Student Loan Assistance Act. Under this law employers will have to contribute $5250 annually towards employee’s student loan, tax free. I think that congress should pass this bill or give it a trail period. It’s smart to include student loan repayment in benefits, and it will prove to be a positive investment for employers. If the bill is passed the companies that will provide this benefit will have the opportunity to increase employee retention and engagement.

All of above the actions, if taken, will help reduce most of the 1.3 trillion student debt in America, but they will not eliminate the entire student debt. Eliminating the student debt would require eliminating the entire tuition which at the current situation is not possible. Ending tuition will end the student debt crisis, but it may lead to extremely high taxes or a different economic crisis. We should try to lower the interest rates and demand the government to find ways to fund colleges and universities so their tuition is more affordable. If bills like Employer Participation Student Loan Repayment Act are passed and get accepted by the employers, they will play a major role in lowering the student

debts.