College Student Debt Essay

Going to college has been taught to be the next step in education after graduating high school but is it truly that easy? The main factor to attending college now is the money issue. In today’s generation receiving a scholarship would be the best way to get through college without the burden of student loan debt piling up as you get further into college. Even though financial aid is available for students seeking college education, some of those students will not all qualify for financial aid. With them not being able to qualify, it leaves taking out student loans to afford those college expenses. By them having no other option but to take out student loans, it is the start to a long road of student loan debt issues.

Majority of student loans today are through the popular loan company Sallie Mae. In 1972, Sallie Mae was founded as a private company for loans but since late 2004, it generally became a publicly traded company. The biggest challenge with student loans is finding one that offers the lowest interest rate. Rising interest rates may make obtaining and paying off student loans more burdensome, particularly for students from financially disadvantaged households. Students from lower income households rely on federal loans more heavily than their higher income counterparts, meaning that students from households with fewer financial resources may be disproportionately affected by increases in interest rates. For instance, over half of all lower income students pay for college with federal loans (ranging from 48% to 56%), whereas less than half of all higher income students pay with federal loans (ranging from 27% to 49%).

While some research suggests that the overall percentage of students is small who report substantial problems with repaying their loans, those with lower current and lifetime earnings report the greatest difficulty and are perhaps overburdened. Given this, it is critical to find ways of reducing students’ reliance on loans, particularly for those from households with fewer financial resources. Where some students take a turn for the worst is not paying attention to the interest rate numbers which adds up over the years causing the owed amount to double and even triple in some cases. As of the beginning of this year, it has been reported that Sallie Mae will split in the fall for money reasons. Sallie Mae will split into two companies with one keeping the name Sallie Mae and the other called Navient who will service most of Sallie Mae’s existing student loan portfolio. With Navient taking over, payments will now go to them instead of Sallie Mae.

Financial aid is given to students based on their household income. Students with a lower based income will be more likely to receive a full amount than a two parent wealthy home. Even though Without the help of financial aid for students, taking out student loans would be the next step for affording college. At that time, student loans could be a great way to help students by giving them a chance to still be able to attend college without the help of financial aid but there is also a downfall to student loans as well. According to the Federal Reserve Board of NY, there are approximately thirty seven billion student loan borrowers with large student loan debt amounts. These student loan debts can take years before they are paid and in some cases, they never get fully paid. This situation with student loan debt is what makes the decision to attend college even more difficult.

With the debt loan rapidly increasing from year to year, it is not only effecting young adults but the economy as well. With Students having this load of debt to pay, it decreases the ability for them to be able to afford things such as cars and their first homes. Without the purchasing of these items, it causes problems such as unemployment. (Bidwell, n.pag)

The Student loan debt crisis not only affects the graduates of the university but also the future students as well. The future students who have one day dreamed about going to college are now taking a second look on attending school because of this debt problem. Without receiving a scholarship or financial aid it is virtually impossible for students to attend college without the possible outcome of being drowned in a large amount of student loan debt. (Bidwell, n.pag)

`Because of the money issue with college, some students do not get to become better educated as well. The skills that you will be able to learn in college are very different from high school teaching. You will learn to think more critically and have reasoning skills that will stay with you for a lifetime. Students will also have a much greater opportunity in the job market as well if they were able to obtain a college degree. Having a college degree is the main source that jobs look for in the work field today whether it is to become a lawyer, doctor, or either some form of office worker. Being able to provide that you have some type of college degree can increase your chances of acquiring a better and high paying job but because of some students do not attend college because of money issues, it lowers their chances of having those same opportunities in general as well. (Raumont, n.pag)

Going to college may be easier for some more than others. Whether it be financial aid issues, student loan debt fear, or some students cancelling the college dream out very quickly because they think financially it is impossible and causing them to miss out on good opportunities

The average cost of student debt is over $30,000 after graduation. Students make the decision to go to college to continue and pursue their education in order to get better jobs and eventually achieve their dream job. College is where students are able to get a feel of adult life and a small taste of what their career holds, but the tables are gradually turning. The percentage of students who attend college is decreasing as each year goes by. The cost of college is ridiculously high and the loans needed to pay for college have a negative effect on these students after college. Many students are not in control of their situation and are forced into taking out loans for college; College is supposed to be where they better themselves. Most students need the money due to the tuition cost, their lack of income, their school choice, their financial education, and other necessary expenses. Most college students are on their own and taking on these obstacles and have no other choice but to depend on loans.

This effects the society and economy, their life after graduation, and chasing their dream job. One of the main sources of student debt for most college students is tuition. The average cost of tuition around $30,000 and is increasing each year. In the article “The Student Debt Delemma: Debt Aversion as a Barrier to College Access”, written by Pamela Burdman, states “the increasing prominence of loans could actually narrow their options and decrease their chances of attending and completing college.” (Burdman) This statement provides an insight to how the costly loans needed to pay for college tuition is a big reason why students are being pushed away from college. “Loans are a central component of college finance.” (Dowd) Many students wanting to attend college do not have a job and most parents do not have the funds to entirely pay for their child to attend college. The lack of income is a big cause of student’s needing to take out loans; eventually leading to a mass amount of debt. “Young people make optimal educational investment decisions if they are able to finance these investments by borrowing against future earnings; the presence of debt has income effects on future decisions.” (Rothstein).

The need for money blinds people and leads them taking out loans in large amounts. It is unfair for students because the lack of funds is not their fault; it is entirely out of their hands. The cost of going to college requires and binds students to taking out loans. Taking out loans not only burdens the students but also the parents. A college graduate will most likely not have their profession started immediately after college and that is when the interest on loans begins. The parents are going to be the ones having to begin paying off the loans until their son or daughter can. The lack of income causes student debt in the long run and may hinder them from starting their life. Most jobs offered to college students do not pay enough for them to begin paying off the loans. These jobs are not a big help and constrict students to still not having the proper funds. Most students going into the school of their choice do not factor in the financial cost of living or attending there. Student are ambitiously naive. They do not think ahead of the crucial outcomes that may have an effect on them in the future: “Many students are struggling to pay back their student loans during very difficult economic times.” (Grant).

Students are interested in attending the best college, which usually is more expensive, to impress employers in their job field. The choice to attend a big name, costly school is completely up to the student, but is ultimately made because of the pressure put on them by society to attend a prestigious school. It is also believed that “debt affects students’ academic decisions during college.” (Rothstein). If the amount of units exceeds the amount recommended and covered by the tuition, students are requires to pay for those said classes. The thought of having more debt is a big reason why students do not attempt to strive for more. Students can easily get into financial trouble with debt and credit cards and unknowingly acquire more debt. Most students get caught up with loans because they assume they can pay it back. Students are not usually financially smart and may get into economical trouble after graduation. Most focus on the now and getting school paid for and over with. The accumulating debt, over the multiple years of college, is not thought of until the negative effects are in play when the college student begins to start his or her own life. “No borrower can completely forecast what surprises life might throw at them that could make loan repayment onerous.” (Dowd).

There are a wide variety of various college expenses that require money. Dorm life may not seem costly, but the charges add up. The simple necessities are not sought to be expensive, but will add up: toilet paper, shampoo and conditioner, tooth paste, food or snacks, freshening products, etc. Going out with friends is a costly process. College students want to have fun and spend time with friends, even if that means eating out. Books are one of the most expensive aspects of going to college. Most colleges do not supply the books required for certain classes, leading students to find a way to pay for them on their own. Most people do not realize what an effect this will have on these students as well as other adults once college graduation comes around. Student debt is seen as an economic drag and a social drag. Student debt can not only effect the student but also people around them; making it a domino effect. Student debt has an effect on students economically by hindering them from getting a job and constantly having monthly payments to pay off loans.

Socially, student is effecting students pursuing going to college and forcing students to get regular, minimum wage paying jobs. “Students who fear borrowing may not seriously consider the benefits of higher education, relegating themselves to lower-paying jobs and fewer opportunities.” (Burdman). Student debt effects students after graduation from achieving life milestones. Statistically, most students cannot and do not purchase a car or purchase a house because of the debt they already have. Student loans do allow students to have some type of credit to make buying houses and cars possible, but the total cost of the loan is a negative toll. With paying back loans, money is now tight and needed strictly for paying off the debt already there. Most people after college wait on having kids. The price of having a kid is rather expensive and may be pushed aside to future years because of the debt already attained. Many college students will get a job, for the time being, simply to pay off the loans. This effects people on getting their dream job.

Most people get complacent and settle with the job already attained and never actually have their dream job. This effect of student debt is not fair to the student who already worked hard to get the degree they have. Settling on anything in life will not get anybody anywhere. Student debt have present problems and future problems. I do agree with all the articles and disagree with the amount of money needed to pay off student debt. The amount, in my opinion, is ridiculous. Student debt is a rope tying students down from accomplishing and achieve the dreams and aspirations they have. I do agree on idea that student loans have significantly greater amount of negatives than they do positives. Student debt is not anyone’s fault, but can be changed. The cost of living is increasing, as well as the cost of attending college. In order for the U.S. to change for the better, something has got to give. As of right now the only change in education, is the decreasing number of students choosing not to attend college due the many restraints it can lead to. Student debt is an important topic because of the fact that the youth is our future.

Education is an important part of anybody’s life. The fact that many are not wanting to pursue a higher education is only going to negatively affect society more so than the person. With student debt trapping students, there will be no positive outcome. Student debt should be looked at as a serious problem in America. Students go to college to better themselves and the costs/debts are conflicting with that. Students are stuck with paying outrageous amounts of money for loans because they chose to attend college. Attending college should benefit students, not hinder them. Many critics will argue that student debt is a part of growing up and a “pat on the back” from adulthood. They might argue that the hard work will pay off and lead to bettering the graduates. Paying off student debt might be seen as a learning experience. Debt is the current way of life and could be the new way of living. Most are accustomed to taking out student loans and see it as a normal thing to do when trying to attend college.

The average cost of student debt is over $30,000 after graduation and will only increase as the years go by. Students make the decision to go to college to continue and pursue their education in order to get better jobs and eventually achieve their dream job. It is unfair for the college students to be chained to paying an outrageous amount of money to pay back their student debt. College is where students are able to get a feel of adult life and a small taste of what their career holds, but the tables are gradually turning. The percentage of students who attend college is decreasing as each year goes by. The cost of college is ridiculously high and the loans needed to pay for college have a negative effect on these students after college.

Many students are not in control of their situation and are forced into taking out loans for college; College is supposed to be where they better themselves. Most students need the money due to the tuition cost, their lack of income, their school choice, their financial education, and other necessary expenses. Most college students are on their own and taking on these obstacles and have no other choice but to depend on loans. This effects the society and economy, their life after graduation, and chasing their dream job. Students go to college to better themselves and the costs/debts are conflicting with that.

Works Cited Page
Dowd, Alicia C. “Dynamic Interactions and Intersubjectivity: Challenges to Causal Modeling in Studies of College Student Debt.” Review of Educational Research. 78.2 (2008): 232-259. Print.

Merlini, Kevin, and Sajay Samuel. The Indentured Students of America. University Park, Pa.: Pennsylvania State University, 2014. Internet resource.

The Student Debt Dilemma: Debt Aversion As a Barrier to College Access. eScholarship, University of California, 2005. Internet resource.

Rothstein, J, and C.E Rouse. “Constrained After College: Student Loans and Early-Career Occupational Choices.” Journal of Public Economics. 95 (2011): 149-163. Print.

Grant, Kyle L. “Student Loans in Bankruptcy and the “Undue Hardship” Exception: Who should Foot the Bill?” Brigham Young University Law Review 2011.3 (2011): 819-47. ProQuest. Web. 16 Nov. 2014.

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