Getting into Debt for a College Education

Problems in the student loan market are not just harming students but are also exacerbating problems with the United States’ recovery from the Great Recession. New York Federal Reserve Bank data has found that outstanding student debt topped $1 trillion in the third quarter of 2013, and the share of loans delinquent 90 days or more rose to 11.8 percent. Furthermore, the share of 25-year-old Americans with student debt increased to 43 percent in 2012 from 25 percent in 2003, while the average loan balance rose 91 percent, to $20,326 from $10,649 (Gage and Lorin). More than 40 million Americans are in student loan debt and because of this, more than 40 million Americans are not able to stimulate the economy as they are not able to buy houses or cars, or start businesses or families (Applebaum). In Wisconsin alone, student loan debt has resulted in a loss of over $200 million annually from new car purchases, while also resulting in middle class households with student loan debt overwhelmingly renting homes instead of owning them (Vanegeren).

oday, society stresses the importance of postsecondary education to students due to the countless ways that an associates, bachelors, masters, or doctorate can enhance an individual future. For an individual to reach financial security in the United States’ economy it is basically mandatory that they have received a college degree. Postsecondary education will provide skills and knowledge that will prepare individuals to be successful within their career as they compete for leading positions. Overall as an individual receives a college degree they will become more likely to experience job security and financial security, and this is important to most as they hope to live a stable life. In college, students are taking as many as one hundred credit hours which contributes to most also accumulating student loan debt as they try to finance their education. Even though the completion of a postsecondary education will contribute to a graduate obtaining a respectable income it may also cause graduates to suffer from high student loan debt which will negatively impact their finances far into their adulthood. R.J. Matson created the image above to emphasize how student loan debt negatively impacts student and changes need to be made to avoid stress caused by the debt.

I owe $40,000, I owe $60,000, I owe $100,000. Isn’t that a lot of money for one person to owe? Graduates have been faced with a serious problem brought about by the constant borrowing of money to gain a reputable education. The debt of loans varies from person to person but the extreme amounts that individuals owe is something the media finds worth gossiping about. Little does the public know, in reality, all the commotion and conversation about these debts are not accountable for the majority of college borrowers. According to A Lifetime of Student Debt? Not Likely by Robin Wilson, she intrigues her targeted college audience by giving examples and providing

Most developed countries regard and guard their education systems since this platform is perceived to have the ability to hold a country together. This is especially so in the USA, where they aim at achieving 60% higher education attainment by 2025 (Cheny and Geoff 10). Such a milestone will not only affect the economy, but also the social aspect in life positively. However, rising costs of education always act as a major barrier for many students whose parents are low-income earners, thus making it unaffordable. This has resulted in a huge credit debt that not only threatens to cripple the financial sector, but also affects the borrowers’ credibility for a long time. As much as education affects the economy in a positive way, college loans may not be the ultimate solution for students to invest in their future. This is because supplementary aspects in the financial sector will be undesirably affected, a move that can render education inoperable since scarcer jobs will be created; consequently, graduates will not have an opening to apply their expertise and knowledge, and contribute to the economy.

A decade ago, student loans barely existed. Today, however, American students borrow up to couple million dollars a year to attend college. An entire generation is burdened with debt, and affected by the modern phenomena known as the “student debt crisis.” In recent years, student loan borrowing rates have risen notably, leading to concern about the public financial risks associated with the financial challenges faced by many students. Of late, the United States government has given out about $170 billion in financial aid annually in an effort to encourage students to attend postsecondary education. Such funding are usually supported by research that consistently finds positive and growing average economic benefits of

Colleges are noticing a drop in students’ interest in a higher education, because it forces them to fall into poverty. Obtaining a higher education is a dream of many working class citizens, but the price to go to a choice college is not available economically. The majority of students use some type of student loan, they have become the norm for attending college (Johnston, Roten 24). College is becoming unaffordable to many lower class students. With tuition prices this high, students are backing out of school and looking for jobs that only require a high school diploma. Student loans should help people, but it is only hurting them because they feel like they can never repay it. Especially since student debt continues to rise. “Student loan debt rose by 328 percent from $241 million in 2003 to $1.08 trillion in 2013, according to the Federal Reserve Bank of New York” (Johnston, Roten 25).

Stern and Larry B. Feinstein that “unless the debtor is living in a cardboard box under the freeway. . .student loans must be repaid.” Students do not have the ability to liquidate their assets and get a fresh start with the absence of student loan debt. The tedious chore of chipping away at the profusion of student loan debt leads to a garnishment of wages, and the debt will continue to accumulate eventually damaging the student’s credit rating. A damaged credit rating will label the student as a “high risk borrower” making it more difficult to receive future loans on a house or car. With 40 million Americans suffering from student loan debt, the economy submits to a tight lending environment and less money in circulation sunsequently decreasing America’s Real

It is no big secret that, in America today, most high-paying jobs require a college degree. Thomas C. Frohlich of USA Today stated that “graduating from college is a prerequisite for the vast majority of high-paying jobs”(2013). With the cost of a college degree increasing in unison with demand, few can earn a degree without the help of student loans. The American Student Assistance website reports that of the twenty million students enrolled in college, about sixty percent are attending with the help of student loans (2014). Obviously, student loan debt affects the individuals that obtain them. However, it also has severe effects upon the nation’s economy.

There are several governmental issues facing the American people in this day in age. Many of these issues have come to the fore front during the Presidential Campaign of 2016. One of the most popular and important issues in the United States is student loans. Colleges are full of expensive fees such as tuition, textbooks, and room and board. Many college students can’t afford to pay all of these fees and are forced to take a student loan. However, the interest rates on student loans are rapidly increasing each year. This leaves many college graduates in the open world with great debt that takes a long time to pay off.

One research study suggest that high unemployment is effecting how students can pay for school (Roksa,& Arum 2012) With countless students graduating during the same time, many students are fighting for jobs after college. Many of college graduates are having a hard time to find jobs within their respect major. One of the variables that the research examine was college students who graduate in four years. the way they went about measuring this was surveying 925 participants that graduated in four years for 2 years after graduation. the participants were men and women from different ethnicities and backgrounds. Their findings were that since being in debt, most of them had a hard time transitioning into adulthood. Many of them seek assistance from family members, and many of them lived at home. Because of being in debt, and living at home. Many of them were single, and only a few got married. Since being in debt, they were less likely to be married or be living with their significant other (Roksa, & Arum

A financial aid website Edvisors reported that the class of 2015 left school with the highest debt level in history. The average student started their careers with $35,051 in student debt. The debt level is clearly on the rise, as the average student in 2012, left school with outstanding debt of $24,301. According to XX, over 10% of borrowers have over $58,000 in debt. Furthermore, the worrying fact is that one in four borrowers end up either in delinquency or default on the

Over the preceding few years, there has been a swift surge in the level of student debt in the United States. Student debt has now exceeded credit card debt in order to become the second largest volume of household debt only lagging to mortgage debt. (Figure One) The idiosyncrasy that makes student debt stand out from other types of debt and liabilities is the fact that it cannot be resolved via bankruptcy. A consequence of this is the financial burden that an individual will have until the burden is repaid. This financial burden will not only affect individual economic outlook but also on the whole United States economy. Currently, more than forty million people in the U.S have student debt that totals $1 trillion. (Dynarski) This upsurge

What do you think of when you hear the words college graduate? Well, in most scenarios, these words would be exciting to someone that just graduated college who have put in years of hard work and dedication to better educate and promote themselves for their future careers. Sadly enough, this is too far common not the case. In today’s society, students are graduating college with piles of debt at an alarming rate. With a troubled economy that is recovering from a recession and jobs difficult to come by for a lot of graduates with bachelor’s degrees, the student loan debt in the United States is bound to be a major crisis that could severely weaken and crimp the economy even more in the coming years.

Young adults are also finding it much easier to settle with a renting. Many of these young adults who typically would start to become first time home buyers are unable to do so. They as well find it difficult to find a good paying job to afford making a down payment on a home. Coupled with the massive amounts of student loans, hinders their ability to save enough for the down payment. Tuition and fees have risen 538% since 1985, outpacing the CPI by over 400%. According to the Federal Reserve Bank of New York, the number of student loan borrowers increased 70% from 2004 to 2012. Now more than 70% of students graduate with loans and outstanding student loan debt totals $1.2 trillion—more than auto and credit card debt. Though it’s difficult to pinpoint the

of 10 college students in the class of 2012 graduated with Student loans and the normal measure of student debt among college students who owed was $29,400. There's not a single clear end to be seen. "The total amount of student debt is increasing essentially at a consistent rate," Wilbert van der Klaauw, a financial analyst with the Federal Reserve Bank of New York tells TIME magazine. "The inflow is considerably higher than the outpouring, which is probably going to proceed later on as dependence on student loans for school is required to remain high."Debt is agonizing for some college students, and an expanding the number of graduates that can't pay back their student loans on time. Misconducts on student debt have risen significantly since the previous decade: 11.5 percent of graduates were no less than 90 days late on paying back their loans toward the finish of 2013, contrasted and 6.2 percent wrongdoings on student loans in 2003. Besides, the Fed's figures on wrongdoings shroud all the more stark information: about portion of all understudies with obligation aren't at present in reimbursement on account of delays and avoidances and the way that understudies are not anticipated that would pay while they're in school, according to van der Klaauw. This means for the graduates who are really anticipated that would pay