Student Loans In America

Student Loans in America

The problem of student loans in America is increasingly becoming more urgent. Collectively, US citizens owe 1.2 trillion in debt from student loans alone (Wegner 750). The amount of student loan debt has even surpassed that of credit cards. As college graduates are weighed down with debt, they are unable to make major life decisions, including buying a house, a car, or having kids. In just a 10 year period between 2005 and 2015, the percentage of homeowners under the age of 35 has gone from 43% to 34% (Wegner 750). Graduates are also less inclined to start their own businesses, in favor of safer jobs. The problem with student loans is hurting the country economically and socially, and will eventually cause huge problems

if it is not eradicated soon. Student Loan debt is becoming a crisis in the United States, and in order to fix the growing problem, actions must be taken out to offer more grants and scholarships to undergraduates, provide more jobs with loan forgiveness, and help to reduce the cost of tuition.
The issue of student loan debt in America is affecting the citizens, as well as the economy as a whole. As prices for college continue to grow, less and less high school graduates are seeking degrees. This will worsen the class divide over time (Rieder). With fewer young people obtaining college degrees, there will be more individuals lacking the qualifications for well-paying jobs. This poses an issue to all millenials- going to college is paired with years of debt to pay off, and not going to college results in low incomes. It has become a difficult cycle that almost every American is thrown into.
For those paying off student loans, making important early life decisions is often put off. House ownership has been declining steadily in the past few years, and this is likely due to student loan debt. Those riddled with debt are lacking the savings for down payments on homes, and often have much lower credit scores than those without student loans (Rieder). “More than 70% of would-be first-time home buyers’ student loan debt is delaying their home purchase, according to a National Association of Realtors survey” (Rieder). This, among other major purchases typically made in one’s 20s, including cars, furniture, and baby’s needs, are all going downhill as a result of student loans. This is becoming a problem for our economy. 20-somethings are usually one of the biggest contributors towards the United State’s GDP, or gross domestic product. This is due to spending amounts in this age group increasing quickly. However, as these young adults are saddled with student loan debt, they are making less of these purchases that fund the economy (Reider).
But for the young people who choose not to get an education further than a high school degree, it’s not any easier. A college degree is almost imperative to obtain a well-paying job. The rates of unemployment are much higher among those without a college degree. While these facts are not unknown among Americans, many high school graduates from lower-class families are not going to college to avoid student loan debt. Many are having to choose the lesser of two evils, because it is becoming more and more difficult to receive higher education in our country. Fixing this issue would be extremely beneficial to the United States. When more of a country’s citizens are educated, with good careers, the nation will flourish quickly. Making college more obtainable for young Americans would be in our best interest, so what can the government do to fix it?
Grant Dollars
Many believe loans to be an outdated and ineffective way to help young adults pay for college (Carter).

They are a halfway fix to a nationwide problem. An organization named Kaleidoscope aims to provide students with grants. The company’s goal is to provide students around the country with more than $1 billion in grants and scholarships. 90% of first-generation students don’t graduate on time as a result of having to keep up with full time jobs while in school to pay off student loans (Carter). The creation of more companies like Kaleidoscope, who can provide high school student with grants, could greatly help the student loan crisis. It is in many millennials best interest to apply for as many scholarships as possible, before taking out loans. For students receiving cheaper tuition due to scholarships, it is more likely they will graduate on time because they are working fewer hours to pay off student loans, thus giving them more time to focus on academics. Providing with more benefits like this will also encourage high school students to work for better grades to receive better scholarships, thus high school graduates will have a better

education.
Loan Forgiveness
With millions of Americans in student loan debt, there are some ways to obtain loan forgiveness. For many working in public service jobs - like teachers - working full time for a certain amount of consecutive years can qualify them for loan forgiveness. They can receive up to $17,500 towards student loan debt. While this is an effective way of helping some with debt, loan forgiveness is limited to very few jobs. Enacting this into careers in more demand would be beneficial to the country. For many graduates, incomes for jobs right after college have no room for loan repayment. Providing more careers with loan aid would encourage young adults to choose the jobs that are building the future of the country. This includes jobs in technology, social media, and more.
Fixing the Root of the Problem
Possibly the most effective way to help the growing student loan crisis would be to decrease the cost of college overall. This is in the hands of congress, who possesses the power to enact laws to encourage this. Placing a cap on how much someone can take out in student loans, or limiting the expense of college in the first place, could help the country’s debt at its source. In the opinion of Mark Cuban, a famous entrepreneur and billionaire, placing a limit on how much students can take out in loans could help the issue. While there is a limit to how much someone can take out in federally issued loans, there is almost no limit to how much they can receive from private lenders (Jacobs). These private lenders make enormous profits, as the interest rates are typically higher than federal lenders. These businesses are thriving off of the debt they are causing millions of young students. Many economists believe that placing a cap on the amount that can be taken out in federal and private loans would not only prevent students from taking out more than they need, but could also force colleges to either reduce tuition costs, or provide with more student aid (Jacobs). “When you put a cap on loans, the money’s not available to universities and colleges,” Mark Cuban explains. Without millions of dollars in loans that colleges are guaranteed to receive every year, they are at a risk of losing huge amounts of money from declining rates of enrollment. This idea would cut off the problem at its root, which is maybe the best way to fix the student loan crisis.
The price of college has increased astronomically in just the past 30 years. This is not
only due to inflation.

The average yearly tuition for public schools in 1988 was at $3,190, adjusted to 2018 dollars. In 2017, the price is at $9,970 (Martin). These prices are increasing much more rapidly than consumer goods, food, or medical expenses. Why is college becoming so costly? A college degree is becoming more and more of a necessity to live comfortably, and students are encouraged as early as grade school to seek out a baccalaureate. Universities are aware of this, and take no shame in taking advantage. As schools are marking up their tuition costs rapidly, they are still flocked with applications, to the point where many colleges are picky with admissions. If congress placed limits on how much public universities can charge for yearly tuition, or tied the rates of tuition increase to the rate of inflation, the student debt crisis would slowly improve. Some states have even implemented free community college, including Tennessee, Oregon, and New

York.
The problem of student loan debt in America has become so large, it seems out of our reach. How can a regular citizen help something so out of their control? Since the issue has increased so dramatically in a small amount of time, it won’t be an overnight fix. We, as young people who represent the future of the country, must encourage congress and elect officials who are determined to make a difference and enact laws to help the crisis. Implementing more grant programs, loan forgiveness and repayment plans can all be of aid. Making college more affordable and easier to obtain will ultimately help our country economically and socially. A more educated nation will improve the lives of many, and make America more advanced, as we fall behind other countries in education. Government officials must think of the future of our country, and help young students everywhere with making college a less stressful, expensive step to the rest of their lives.