student loan crisis argumentative essay

• Skip to main content
• Keyboard shortcuts for audio player

Is it fair to forgive student loans? Examining 3 of the arguments of a heated debate

Scott Horsley

Student loan borrowers stage a rally in front of The White House on Aug. 25 to celebrate President Biden cancelling student debt. The plan has sparked heated debate, including about its economic fairness. Paul Morigi/Getty Images for We the 45m hide caption

Student loan borrowers stage a rally in front of The White House on Aug. 25 to celebrate President Biden cancelling student debt. The plan has sparked heated debate, including about its economic fairness.

President Biden's plan to forgive hundreds of billions of dollars in student debt is sparking heated debate.

Biden last week announced plans to forgive up to $20,000 in federal student loan debt for Pell Grant recipients and up to $10,000 for others who qualify.

The news will provide relief for borrowers at a time when the cost of higher education has surged.

Student loan forgiveness is politically popular. But not all Democrats are on board

But critics are questioning the fairness of the plan and warn about the potential impact on inflation should the students with the forgiven loans increase their spending.

Here are three key arguments – for and against the wisdom of Biden's decision.

Raising living standards or adding fuel to inflation?

Undoubtedly, student debt is a big burden for a lot of people.

Under Biden's plan, 43 million people stand to have their loan payments reduced, while 20 million would have their debt forgiven altogether.

People whose payments are cut or eliminated should have more money to spend elsewhere – maybe to buy a car, put a down payment on a house or even put money aside for their own kids' college savings plan. So the debt forgiveness has the potential to raise the living standard for tens of millions of people.

Critics, however, say that additional spending power would just pour more gasoline on the inflationary fire in an economy where businesses are already struggling to keep up with consumer demand.

Inflation remains near its highest rate in 40 years and the Federal Reserve is moving to aggressively raise interest rates in hopes of bringing prices back under control.

Not all economists believe the debt forgiveness will do much to fuel inflation.

Debt forgiveness is not like the $1200 relief checks the government sent out last year, which some experts say added to inflationary pressure. Borrowers won't suddenly have $20,000 deposited in their bank accounts. Instead, they'll be relieved of making loan payments over many years.

President Biden announces student loan relief in the Roosevelt Room of the White House in Washington, D.C. on Aug. 24. Olivier Douliery/AFP via Getty Images hide caption

President Biden announces student loan relief in the Roosevelt Room of the White House in Washington, D.C. on Aug. 24.

Because the relief is dribbled out slowly, Ali Bustamante, who's with left-leaning Roosevelt Institute says Biden's move won't move the needle on inflation very much.

"It's just really a drop in the bucket when it come to just the massive level of consumer spending in our very service- and consumer-driven economy," he says.

The White House also notes that borrowers who still have outstanding student debt will have to start making payments again next year. Those payments have been on hold throughout the pandemic.

Restarting them will take money out of borrower's pockets, offsetting some of the additional spending power that comes from loan forgiveness.

Helping lower income Americans or a sop to the rich?

Another big point of contention has to do with fairness.

Forgiving loans would would effectively transfer hundreds of billions of dollars in debt from individuals and families to the federal government, and ultimately, the taxpayers.

Some believe that transfer effectively penalizes people who scrimped and saved to pay for college, as well as the majority of Americans who don't go to college.

They might not mind subsidizing a newly minted social worker, making $25,000 a year. But they might bristle at underwriting debt relief for a business school graduate who's about to go to Wall Street and earn six figures.

Students from George Washington University wear their graduation gowns outside of the White House in Washington, D.C, on May 18. Economists worry President Biden's plan to forgive student loans could encourage more people to take on debt in the hopes of also being forgiven. Stefani Reynolds/AFP via Getty Images hide caption

Students from George Washington University wear their graduation gowns outside of the White House in Washington, D.C, on May 18. Economists worry President Biden's plan to forgive student loans could encourage more people to take on debt in the hopes of also being forgiven.

The White House estimates 90% of the debt relief would go to people making under $75,000 a year. Lower-income borrowers who qualified for Pell Grants in college are eligible for twice as much debt forgiveness as other borrowers.

But individuals making as much as $125,000 and couples making up to $250,000 are eligible for some debt forgiveness. Subsidizing college for those upper-income borrowers might rub people the wrong way.

"I still think a lot of this benefit is going to go to doctors, lawyers, MBAs, other graduates that have very high earnings potential and may even have very high earnings this year already," says Marc Goldwein senior policy director at the Committee for a Responsible Federal Budget.

Helping those in need or making college tuition worse?

Goldwein also complains that the loan forgiveness doesn't address the larger problem of soaring college tuition costs.

In fact, he suggests, it might make that problem worse — like a Band-Aid that masks a more serious infection underneath.

For years, the cost of college education has risen much faster than inflation, which is one reason student debt has exploded.

And now what? The question that follows Biden's student loan forgiveness plan

By forgiving some of that debt, the government will provide relief to current and former students.

But Goldwein says the government might encourage future students to take on even more debt, while doing little to instill cost discipline at schools.

"People are going to assume there's a likelihood that debt is canceled again and again," Goldwein says. "And if you assume there's a likelihood it's canceled, you're going to be more likely to take out more debt up front. That's going to give colleges more pricing power to raise tuition without pressure and to offer more low-value degrees."

The old rule in economics is when the government subsidizes something, you tend to get more of it. And that includes high tuition and college debt.

• student debt forgiveness
• student loans
• student loan debt
• college tuition

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

What Will It Take to Solve the Student Loan Crisis?

• Daniel M. Johnson

Reform needs to come from outside of higher ed.

The history, size, and complexity of the student loan crisis, combined with the interlocking, interdependent higher education networks — universities, lending institutions, and government agencies — defy simplistic reforms and have largely immunized the student loan industry from having to make significant changes. These institutions and agencies have erected a financing superstructure that meets the immediate needs of students and universities for cash, but dramatically fails the test for long-term cost effectiveness and economic sustainability. We are long overdue for genuine, transformative reform. But one thing has become increasingly clear: solutions to the high cost of higher education and the student loan crisis will not come from the higher education establishment. Our colleges and universities, their presidents, boards of trustees, state higher education systems, and the dozen or more higher education associations in Washington, D.C., have serious conflicts of interest on this issue and will not be the source of cost-cutting reforms.

Every day, there are news stories about the college tuition crisis. But what is the crisis we are seeking to solve? Is it the staggering amount of student debt? The rapidly rising cost of higher education? The interest being collected on student loans? The high default rate on student loans? Or all of the above?

• DJ Daniel M. Johnson is President Emeritus & Distinguished University Professor of Public Policy and Economic Development at the University of Toledo and is author of The Uncertain Future of American Public Higher Education .

Partner Center

Covering a story? Visit our page for journalists or call (773) 702-8360.

UChicago Class Visits

Top stories.

• Book of Gary Becker’s unpublished work shows his evolution as an economist

Winners of the 2024 UChicago Science as Art competition announced

Ways to celebrate earth month 2024 at the university of chicago, a smarter way to solve the student debt problem, blanket loan forgiveness less effective than helping those who need it most, research suggests.

Editor’s Note: This piece was written by Constantine Yannelis, an assistant professor of finance at the University of Chicago Booth School of Business, and shared by Chicago Booth Review . The essay is based on testimony Yannelis submitted to the U.S. Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Economic Policy in April 2021.

Education is the single highest-return investment most Americans will make, so getting our system of higher-education finance right is fundamentally important for U.S. households and the economy.

A key point in the student-loan debate is that the outcomes of borrowers vary widely. Undeniably, a significant number of borrowers are struggling, and are sympathetic candidates for some kind of relief. Student-loan balances have surged over the past decades. According to the New York Fed, last year student loans had the highest delinquency rate of any form of household debt.

Most student borrowers end up as higher earners who do not have difficulties repaying their loans. A college education is, in the vast majority of cases in America, a ticket to success and a high-paying job. Of those who struggle to repay their loans, a large portion attended a relatively small number of institutions—predominantly for-profit colleges.

The core of the problem in the student-loan market lies in a misalignment of incentives for students, schools, and the government. This misalignment comes from the fact that borrowers use government loans to pay tuition to schools. If borrowers end up getting poor jobs, and they default on their loans, schools are not on the hook—taxpayers pay the costs. How do we address this incentive problem? There are many options, but one of the most commonly proposed solutions is universal loan forgiveness.

Various forms of blanket student-loan cancellation have been suggested, but all are extremely regressive, helping higher-income borrowers more than lower-income ones. This is primarily because people who go to college tend to earn more than those who do not go to college, and people who spend more on their college education—such as those who attend medical and law schools—tend to earn more than those who spend less on their college education, such as dropouts or associate’s degree holders.

My own research with Sylvain Catherine of the University of Pennsylvania demonstrates that most of the benefits of a universal-loan-cancellation policy in the United States would accrue to high-income individuals, those in the top 20 percent of the earnings distribution, who would receive six to eight times as much debt relief as individuals in the bottom 20 percent of the earnings distribution. These basic patterns are true for capped forgiveness policies that limit forgiveness up to $10,000 or $50,000 as well.

Another problem with capped student-loan forgiveness is that many struggling borrowers will still face difficulties. A small number of borrowers have large balances and low incomes. Policies forgiving $10,000 or $50,000 in debt will leave their significant problems unaddressed.

While income phaseouts—policies that limit or cut off relief for people above a certain income threshold—make forgiveness less regressive, they are blunt instruments and lead to many individuals who earn large amounts over their lives, such as medical residents and judicial clerks, receiving substantial loan forgiveness.

A fact that is often missed in the policy debate is that we already have a progressive student-loan forgiveness program, and that is income-driven repayment.

If policy makers want to make sure that funds get into the hands of borrowers at the bottom of the income distribution in a progressive way, blanket student-loan forgiveness does not accomplish this goal. Rather, the policy primarily benefits high earners.

While I am convinced from my own research that student-loan forgiveness is regressive, this is also the consensus of economists. The Initiative on Global Markets at Chicago Booth asked a panel of prominent economists to weigh in on this statement: “Having the government issue additional debt to pay off current outstanding loans would be net regressive.” The panel included economists from leading institutions from both the left and the right. The results of the survey were telling. Not a single economist disagreed with the idea that student-loan forgiveness is regressive. This is because the facts are clear—to borrow a phrase commonly used, “The science is settled”—student-loan forgiveness is a regressive policy that mostly benefits upper-income and upper-middle-class individuals.

Another facet of this policy issue is the effect of student-loan forgiveness on racial inequality. One of the most distressing failures of the federal loan program is the high default rates and significant loan burdens on Black borrowers. And student debt has been implicated as a contributor to the Black-white wealth gap. However, the data show that student debt is not a primary driver of the wealth gap, and student-loan forgiveness would make little progress closing the gap but at great expense. The average wealth of a white family is $171,000, while the average wealth of a Black family is $17,150. The racial wealth gap is thus approximately $153,850. According to our paper, which uses data from the Survey of Consumer Finances, and not taking into account the present value of the loan, the average white family holds $6,157 in student debt, while the average Black family holds $10,630. These numbers are unconditional on holding any student debt.

Thus, if all student loans were forgiven, the racial wealth gap would shrink from $153,850 to $149,377. The loan-cancellation policy would cost about $1.7 trillion and only shrink the racial wealth gap by about 3 percent. Surely there are much more effective ways to invest $1.7 trillion if the goal of policy makers is to close the racial wealth gap. For example, targeted, means-tested social-insurance programs are far more likely to benefit Black Americans relative to student-loan forgiveness. For most American families, their largest asset is their home, so increasing property values and homeownership among Black Americans would also likely do much more to close the racial wealth gap. Still, the racial income gap is the primary driver of the wealth gap; wealth is ultimately driven by earnings and workers’ skills—what economists call human capital. In sum, forgiving student-loan debt is a costly way to close a very small portion of the Black-white wealth gap.

How can we provide relief to borrowers who need it, while avoiding making large payments to well-off individuals? There are a number of policy options for legislators to consider. One is to bring back bankruptcy protection for student-loan borrowers.

Another option is expanding the use of income-driven repayment. A fact that is often missed in the policy debate is that we already have a progressive student-loan forgiveness program, and that is income-driven repayment (IDR). IDR plans link payments to income: borrowers typically pay 10–15 percent of their income above 150 percent of the federal poverty line. Depending on the plan, after 20 or 25 years, remaining balances are forgiven. Thus, if borrowers earn below 150 percent of the poverty line, as low-income individuals, they never pay anything, and the debt is forgiven. If borrowers earn low amounts above 150 percent of the poverty line, they make some payments and receive partial forgiveness. If borrowers earn a high income, they fully repay their loan. Put simply, higher-income people pay more and lower-income people pay less. IDR is thus a progressive policy.

IDR plans provide relief to struggling borrowers who face adverse life events or are otherwise unable to earn high incomes. There have been problems with the implementation of IDR plans in the U.S., but these are fixable, including through recent legislation. Many countries such as the United Kingdom and Australia successfully operate IDR programs that are administered through their respective tax authorities.

Beyond providing relief to borrowers, which is important, we could do more to fix technical problems and incentives. We could give servicers more tools to contact borrowers and inform them of repayment options such as IDR, and we could also incentivize servicers to sign more people up for an IDR plan. But while we may be able to make some technical fixes, servicers are not the root of the problem in the student-loan market: a small number of schools and programs account for a large portion of adverse outcomes.

To fix this, policy makers can also directly align the incentives for schools and borrowers. For example, Brazil, which has had similar problems with its student-loan program, recently gave schools skin in the game by requiring them to pay a fee based on dropout and default rates. This helped align the incentives of the schools and the student borrowers. Making revenues go directly to schools from IDR plans, or implementing income-share agreements in which individuals pay an uncapped portion of their income, could also help align the incentives of schools, students, and taxpayers.

Federal student loans are an important part of college financing and intergenerational mobility. The root of our student-loan crisis is a misalignment of incentives. Since the problem has been so slow moving and continuous, I like the analogy of a frog slowly boiling in a pot of water over a flame. Policies such as student-debt cancellation are not extinguishing the flame—they aren’t fixing the incentive problem. All they do is move the frog into a slightly cooler pot of water. And if we don’t fix the core of the problem, even if we forgive $50,000 of debt for current borrowers, balances will continue to grow, and we will be facing a similar crisis in 10 or 20 years.

Recommended stories

Why a 19th-century bank failure still matters

Household spending swings dramatically in reaction to coronavirus

Get more with UChicago News delivered to your inbox.

Related Topics

Latest news.

Office of Sustainability

Meet A UChicagoan

Ecologist tracks how insects can devastate forests—and how to stop them

Big Brains podcast

Big Brains podcast: What dogs are teaching us about aging

Where do breakthrough discoveries and ideas come from?

Explore The Day Tomorrow Began

Department of Race, Diaspora, and Indigeneity

Course on Afrofuturism brings together UChicago students and community members

Education Lab

National study finds in-school, high-dosage tutoring can reverse pandemic-era learning loss

Around uchicago.

Lecture Series

Author and ‘Odyssey’ translator Daniel Mendelsohn to deliver Berlin Family Lectures beginning April 23

Alumni Awards

Two Nobel laureates among recipients of UChicago’s 2024 Alumni Awards

Faculty Awards

Profs. John MacAloon and Martha Nussbaum to receive 2024 Norman Maclean Faculty…

Sloan Research Fellowships

Five UChicago scholars awarded prestigious Sloan Fellowships in 2024

Convocation

Prof. John List named speaker for UChicago’s 2024 Convocation ceremony

The College

Anna Chlumsky, AB’02, named UChicago’s 2024 Class Day speaker

UChicago Medicine

“I saw an opportunity to leverage the intellectual firepower of a world-class university for advancing cancer research and care.”

Announcement

Ethan Bueno de Mesquita appointed dean of the Harris School of Public Policy

• school Campus Bookshelves
• menu_book Bookshelves
• perm_media Learning Objects
• login Login
• how_to_reg Request Instructor Account
• hub Instructor Commons
• Download Page (PDF)
• Download Full Book (PDF)
• Periodic Table
• Physics Constants
• Scientific Calculator
• Reference & Cite
• Tools expand_more
• Readability

selected template will load here

This action is not available.

65: Ending the Secrecy of the Student Debt Crisis (Senderowicz)

• Last updated
• Save as PDF
• Page ID 21582

Daniela Senderowicz

#proposal, #systemanalysis, #sharedvalues, #finances, #currentevents, #logos, #ethos, #kairos, #reportinginformation #policy

Fear of facing society’s ostracism for failure to pay them back has left borrowers alienated and trapped in a lending system that is engulfing them in debt bondage. “Face in the Dark” by Elijah Hiett via Unsplash

Gamblers and reality TV stars can claim bankruptcy protections when in financial trouble, but 44 million student loan borrowers can’t. Unemployed, underpaid, destitute, sick, or struggling borrowers simply aren’t able to start anew.

With a default rate approaching 40 percent , one would expect armies of distressed borrowers marching in the streets demanding relief from a system that has singled out their financial anguish. Distressed student debtors, however, seem to be terror-struck about coming forward to a society that, they say, ostracizes them for their inability to keep up with their finances.

When we spoke to several student borrowers, almost none were willing to share their names. “I can’t tell anyone how much I’m struggling,” says a 39-year-old Oregon physician who went into student loan default after his wife’s illness drained their finances. He is terrified of losing his patients and reputation if he speaks out about his financial problems.

“If I shared this with anyone they will look down upon me as some kind of fool,” explains a North Carolina psychologist who is now beyond retirement age. He explains that his student debt balance soared after losing a well-paying position during the financial crisis, and that he is struggling to pay it back.

Financial shame alienates struggling borrowers. Debtors blame themselves and self-loathe when they can’t make their payments, explains Colette Simone, a Michigan psychologist. “There is so much fear of sharing the reality of their financial situation and the devastation it is causing in every facet of their lives,” she says. “The consequences of coming forward can result in social pushback and possible job–related complications, which only deepen their suffering.”

Debtors are isolated, anxious, and in the worst cases have taken their own lives . Simone confirms that she has “worked with debtors who were suicidal or had psychological breakdowns requiring psychiatric hospitalization.”

With an average debt of just over $37,000 per borrower for the class of 2016 , and given that incomes have been flat since the 1970s , it’s not surprising that borrowers are struggling to pay. Student loans have a squeaky-clean reputation, and society tends to view them as a noble symbol of the taxpayers’ generosity to the working poor. Fear of facing society’s ostracism for failure to pay them back has left borrowers alienated and trapped in a lending system that is engulfing them in debt bondage.

“Alienation impacts mental health issues,” says New York mental health counselor Harriet Fraad. “As long as they blame themselves within the system, they’re lost.”

Student debtors can counter despair by fighting back through activism and political engagement, she says. “Connection is the antidote to alienation, and engaging in activism, along with therapy, is a way to recovery.”

Despite the fear of coming forward, some activists are building a social movement in which meaningful connections among borrowers can counter the taboo of openly admitting financial ruin.

Student Loan Justice, a national grassroots lobby group, is attempting to build this movement by pushing for robust legislation to return bankruptcy protections to borrowers. The group has active chapters in almost every state, with members directly lobbying their local representatives to sign on as co-sponsors to HR 2366. Activists are building a supportive community for struggling borrowers through political agitation, local engagement, storytelling, and by spreading a courageous message of hope that may embolden traumatized borrowers to come forward and unite.

Julie Margetaa Morgan , a fellow at The Roosevelt Institute, recently noted that student debt servicers like Navient have a powerful influence on lawmakers. “Student loan borrowers may not have millions to spend on lobbying, but they have something equally, if not more, powerful: millions of voices,” she says.

A recent manifesto by activist and recent graduate Eli Campbell calls for radical unity among borrowers. “Young people live in constant fear that they’ll never be able to pay off their debt. We’re not buying houses or able to afford the hallmarks of the American dream,” he explains.

In his call for a unified national boycott of student loan payments, inevitably leading to a mass default on this debt, Campbell hopes to expose this crisis and instigate radical change. In a recent interview he explained that the conditions for borrowers are so bad already that debtors may not join the boycott willingly. Instead, participation may simply happen by default given the lack of proper work opportunities that lead to borrowers’ inability to pay.

While a large-scale default may not happen through willful and supportive collective action, ending the secrecy of the crisis through massive national attention may destigmatize the shame of financial defeat and finally bring debtors out of the isolation that causes them so much despair.

Activists are calling for a significant conversation about the commodification of educating our youth, shifting our focus toward investing into the promise of the young and able, rather than the guarantee of their perpetual debt bondage. In calling for collective action they soothe the hurt of so many alienated debtors, breaking the taboos that allow them to say, “Me, too” and admit openly that in this financial climate we all need each other to move forward.

____________________

Daniela Senderowicz is a Northwest activist and writer. This essay is reprinted from Yes! Magazine .

Ending the Secrecy of the Student Debt Crisis by Daniela Senderowicz is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License .

Experts debate whether student loans are a crisis for students and the economy

Subscribe to the brown center on education policy newsletter, liz sablich liz sablich director of communications - governance studies, brookings institution @lizzysabs.

July 30, 2015

Brown Center Fellow Beth Akers recently participated in a lively debate over the controversial motion, “student loans are a crisis for students and the economy,” at the National Association of Student Financial Aid Administrators (NASFAA) annual conference. Akers was joined by Andrew Kelly, director of the Center on Higher Education Reform at the American Enterprise Institute (AEI), in arguing against the motion, while Kevin Fudge, manager of Government Relations and Community Affairs at American Student Assistance, and Mark Huelsman, senior policy analyst at Demos, argued in favor. In the words of moderator John Donovan, the faceoff was “a battle of persuasion,” with the objective being to sway as many audience votes as possible.

In the course of one hour, both sides were given opportunities to make arguments, to react to one another, and to respond to audience questions, and in that time all four participants made many compelling points.

Huelsman argued succinctly that “The most important reason we face a crisis in the system is that a degree is far from guaranteed.” He went on to explain that four in ten low-income borrowers and four in ten black borrowers drop out of school, with the vast majority citing student loan debt as the number one reason for dropping out. Most concerning of all is the fact that drop-outs are four times more likely to default on their loans.

Huelsman’s teammate Kevin Fudge pointed to the impact of student loan debt on other lifetime outcomes as evidence of a crisis, stating that borrowers he worked with “consistently expressed concern about how their loans affected their ability to pay for housing and basic goods and services, let alone save for retirement.” This was one area of discussion that received a direct challenge from an opponent, with Andrew Kelly claiming that many arguments about the effect of student debt on home ownership mistake correlation for causation.

In responding to her opponents, Akers argued repeatedly that the conclusion that there is a student debt crisis is the result of consistently making mistakes in logic, such as comparing a stock of lifetime debt to a flow of annual income. For more on this common error, see Akers and Chingos’s 2014 report on the topic.

For his part, Andrew Kelly focused largely on the consequences of referring to a student debt crisis, arguing that, “If we define this as a debt problem it leads us to a place where our object is to lower debt loads, which leads to all sorts of bad policy like proposals to refinance loans that deliver large subsidies to people who are having no trouble paying loans back.”

Akers touched on another potential consequence of the “crisis” rhetoric in saying, “It’s critically important that low-income students continue to have access to the benefits afforded by higher education. It makes me very scared to think that we’re going to continue to talk about debt in this way and potentially reduce the opportunities that low-income students have.”

While the exchange between sides was at times heated, several areas of consensus emerged throughout the conversation as well. All four participants agreed that undeniably, some student loan borrowers are struggling tremendously. While Huelsman and Fudge pointed to this fact as evidence of a crisis—a crisis that exists among a certain, vulnerable group of borrowers—that demands addressing, Akers and Kelly argued that these individual crises should not be confused for a macro crisis. Both sides also concurred that a crisis of information exists in the higher education and student loan markets. This is a problem that Akers has specifically investigated in prior research and argues is in dire need of fixing.

Despite some degree of consensus, these two sides were ultimately arguing against one another. So, who won? Based on the number of votes that were swayed between an initial vote before the debate and a final vote after the closing statements, the Akers/Kelly team was declared victorious. Not only did they convince 16 percent of the audience to change its vote, they also swayed the majority, with 57 percent of the audience ultimately agreeing that “student loans are not a crisis for students and the economy.”

How would you have voted? Watch the debate here to decide. 

Higher Education

Governance Studies

Brown Center on Education Policy

Phillip Levine

April 12, 2024

Hannah C. Kistler, Shaun M. Dougherty

April 9, 2024

Katharine Meyer, Rachel M. Perera, Michael Hansen

Essay On Student Loan Crisis

The student loan crisis is worse than ever and more people are leaving college thousands of dollars in debt before they even have a job or any type of income. With the rising cost of college and living expenses, people are taking out more student loans for higher amounts, leaving more people in an undesirable amount of debt and essentially trapping them. “There's currently no way to get rid of federal student debt other than paying off the loans.” (Quinton, Sophie, why you might be paying student loans till you retire). Because student loans are not like other loans they will not disappear if you declare bankruptcy, so the borrower is forced to pay them back even if it means you cannot afford to do so. There is not just one thing that is causing the student loan crisis this is a combination of many things that are being overlooked or ignored. We need to look into the reasoning to determine why this is happening, what problems it is causing and then come up with a solution that can stop the problem. Student loans are a great tool to use if you need financial help for college, but one must be careful and consider the consequences and understand what a student loan is and how to deal with them to make a responsible decision about their financial future. Before we can go any further, we need to first define what exactly a student loan is, and what student loans can entail. A student loan is defined as “A type of loan designed to help students pay for post-secondary education and the associated fees”. Student loans are marvelous and a supportive tool for college students, but people don't realize that everything they borrow needs to be paid back with interest. Five years ago in 2012 “71%” of students graduating four-year colleges had student loans and the average indebtedness of a college graduate was “$29,400”. If you compare that to 1993 the average indebtedness of a college graduate was “$9,450” (Average Student Loan Debt, 1993-2012). In only 19 years there was a $19,950 dollar difference in the averages. Those numbers do not include the interest that the student will have to pay back over time. All of those factors are just a small part of what makes up student debt but it is good to have a general

Student Loan Debt And Why It Is A Problem Essay

A problem with student loan debt is that students gain more debt because they are not able to pay off the student loans within the given time which also causes them to put certain life decisions on hold. According to Sophie Quinton debt is a problem for the recent college graduates because “There’s currently no way to get rid of federal student debt other than paying off the loans. while some borrowers are paying off their debts just fine, overall they are adding debt faster than they are shedding it”(Quinton). According to Jamaal Abdul-Alim stated that a “survey - titled Student Loan Debt: Who’s Paying the Price?- revealed a number of troubling statistics about the practical ways that student loans are impacting college graduates in their everyday lives. For instance the survey found that: 49

Persuasive Essay On Student Debt

Student loan has been skyrocketing since 2006, and it keeps increasing each year. To make

Persuasive Essay On Student Loans

College students graduate with an average student loan debt of approximately $37000. Of course, that's not the whole story. Millions of college graduates have student loan debts ranging from $50,000 to over $200,000.

Because of the nation’s national rising debt, student loan forgiveness has been a significant topic of debate because of how much it can affect our nation’s debt and doesn’t always help the student. Student loan debt is one of the highest debt causes, but sometimes we forget that we are the ones that sign the line on the contract to be in years of debt. This is because we value our education. But this does not mean that just because we can’t find an amazing, high paying job right out of college that we should have our loans forgiven. We want the easy way out of something that isn’t easy, so why should the government pay for our debt? Yes, college is very expensive and that is the governments fault, but again we are the ones that signed the line on the loan papers. (Sam Adolphsen, 583)

Student Loan Debt Research Paper

Student loan debt is the second leading component of American consumer debt. Student loans can be seen as a challenge that has to be overcome, on top of college itself. This is an opportunity for college students or former college students to show their responsibility. It is the responsibility of the student to find some way to pay this debt. This situation should not be the taxpayers’ problem. Student loan debt is a problem that does not always have an easy solution for the debtor.

The Problem Of Student Debt Crisis

In 1976, the average cost to attend a four year public university was $2,175; today, the average cost to attend a four year public university is $25,000 (Snyder). This means it is 1150% more expensive to go to college in The United States today than it was 30 years ago. This obviously would create a problem on how we as people are going to pay for our higher education. Today college has become almost a necessity to have a satisfactory life, and with these rising prices some individuals believe student loans are the only option. There are many reasons as to why the prices have risen, but the one undeniable fact is that this has created a problem within our country. Which, is known as the student debt crisis, and it has been on the rise the past couple years. This problem is affecting people all around the United States, and is causing multitude of problems for them all because they wanted to pursue higher education. Wanting to better your opportunities by bettering yourself is not something that needs to be punished, and sadly that is what is happening. This problem is something that needs to be fixed for the sake of Americans and our economy, but will also take time and a multitude of steps to correct.

Student Debt Research Paper

Student debt has become harder and harder for borrowers to pay back. According to Ivanchev, student debt has increased from seven-percent in 2003 to about fifteen-percent in 2012 (2014). If you go into default on your loans you could lose your professional license in some states, or even have your driver’s license suspended. Congress needs to fix student aid so that it’ll lower interest rates, and in some cases forgive debt; according to federal agencies, student debt is creating a major effect on the economy and its borrowers.

Student Debt Essay

While student debt has been an issue for quite some time, the steady increase annually is alarming. According to MarketWatch, The average amount of debt per student upon graduating in 2015 was $35,051; about $2,000 more than class of 2014 graduates. In comparison, the amount of debt per student in 1993 stood just under $10,000. In a report by the Urban Institute, a Washington, DC-based think tank that carries out economic and social policy research, the quantity of college graduates with more than $40,000 in student loans has increased by almost ten times in eight years. Not only is the amount of debt per student upon graduating steadily increasing, but also the amount of students requiring loans. Currently, the amount of students requiring loans to graduate stands around seventy percent; ten percent higher than class of 1997 graduates. These are

Student Loan Debt Is The Biggest Economic Crisis Or Threat?

Throughout the United States, student loans have been show to drag this economy down. Student loans have been a big problem through many of the years. It has been showing a trend and it is raising and exceeding many of the debt types each year. Many problems that students that have loans cause are, “ 20 percent of respondents indicated they cannot get a loan for other items, are unable to purchase a home, and student loan debt negatively impacts their credit. 18 percent of individuals indicated they are living paycheck to paycheck, “drowning” in debt, and have a large debt load. 13 percent indicated they have a lower quality of life and are unable to afford the extra things. 12 percent indicated they are unable to save for their retirement or their children’s education and feel less secure.” Students that have

Essay On Student Debt

Students High in Debts Crisis "The only good thing about student loans is that the day I die my children will not have to pay for them” (Block). The problem with everyone not being able to go to college is the cost of it. Many High school graduates don’t even think about going to college because of how crazy expensive it is. Many students drop outs later on due to not being able to keep paying and the ones who do graduates struggle in paying off their student loans for years.

In America today, the student loan debt crisis has reached an astonishing 1.2 trillion dollars in debt, making it the second largest source of debt in the United States, according to forbes.com. This is due to the cut to funding colleges, which used to be 7,000 dollars for each student and after 15 years is now 4,000 dollars for each student. There are solutions that could unquestionably lower student loan debt: colleges could stop competing to have more useless luxuries, take a certain percent out of the students income until it is paid off, and more of students’ parents could take the loan and not their child. While there is no perfect solution to make this problem go away (that we know of), there are ways we can lower the astounding amount of student debt in America today, even if it is just a small piece of it.

Argumentative Essay On Student Debt

But the student loan debt crisis has far reaching implications for our economy. Young adults who finish college burdened with debt hold back on purchases that were once common for young families, like buying cars and houses—things that make our economy stronger and our middle class more secure.

Student Loans Debt

Student loans debt is a major problem in this society. It has escalated and accumulated over the years as more people attend college. Americans postulate that going to college gives them an opportunity to succeed in life and to earn a great salary. On the other hand they are leading themselves owning the government money with so much debt. It’s not just one loan most of students have to pay for both, there would be different loan due dates that most students have to keep track of while going to school. There are whole bunch of scholarship opportunity out there people doesn’t even use them. Some students borrow more them they can pay back. Regardless, money borrowed for education would have to be paid back either concurrently or after one receives

Student Loan Debt Crisis Essay

In the United States today, the number of students graduating college with student loan debt is quite astonishing. In the article titled, “How the $1.2 Trillion College Debt Crisis Is Crippling Students, Parents And The Economy”, we will examine and break down the student loan debt crisis by the numbers. Today, almost two-third’s of students graduating college are graduating with an average of $26,000 in debt. For most students, $26,000 is a lot of money when the average annual income for a first year graduate is only in the mid $40,000 a year range. According to the Consumer Financial Protection Bureau, student loan debt has reached a new milestone, crossing the $1.2 trillion mark (Denhart, 2013, Introduction, par. 2). With student loan debt levels

The sheer amount of debt that a college student acquires after they finish their schooling is an egregious sum. The average amount that a borrower owes after they graduate is $26,000 (Denhart). These now excessive amounts of debt are thrust upon graduates, both young and old, and could take several years to pay off. Additionally, the national student debt has increased from $80 billion to $500 billion from 1995 to 2011 ("Student debt"). A young adult, fresh out of school, potentially has few approaches to attempt to decrease a debt of such enormity with perhaps a limited income. While less than 1% of people have loans

Related Topics

Home — Essay Samples — Education — Student Loan Debt — Student Loan Debt: Challenges and Solutions

Student Loan Debt: Challenges and Solutions

• Categories: Student Loan Debt

About this sample

Words: 642 |

Published: Jan 31, 2024

Words: 642 | Page: 1 | 4 min read

Table of contents

Overview of the policy, policy analysis, policy context, policy alternatives, policy recommendations.

• Adams, R., & Moore, D. (2019). The Impact of Student Loan Debt on College Students. Journal of Higher Education, 45(2), 123-136.
• Education Data Initiative. (2020). Student Loan Debt Statistics. Retrieved from https://www.educationdata.org/student-loan-debt-statistics
• U.S. Department of Education. (2021). Federal Student Aid. Retrieved from https://studentaid.gov/
• Williams, J. (2018). Understanding the Legal and Regulatory Framework of Student Loans. Journal of Law and Public Policy , 35(4), 289-302.

Cite this Essay

Let us write you an essay from scratch

• 450+ experts on 30 subjects ready to help
• Custom essay delivered in as few as 3 hours

Get high-quality help

Verified writer

• Expert in: Education

+ 120 experts online

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy . We’ll occasionally send you promo and account related email

No need to pay just yet!

Related Essays

1 pages / 472 words

1 pages / 533 words

2 pages / 848 words

3 pages / 1391 words

Remember! This is just a sample.

You can get your custom paper by one of our expert writers.

121 writers online

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled

Related Essays on Student Loan Debt

As a college student, managing finances can be a daunting task. With tuition fees, living expenses, and social activities, it's easy to overspend and fall into debt. However, budgeting is a crucial tool for financial stability [...]

Ashe, D. D., & McCrea, M. L. (2012). Opportunities to learn in higher education: exploring a three-dimensional approach to research and practice. Routledge.Chapman, D. W., & Pascarella, E. T. (1983). Predictors of [...]

Student loan debt is a growing problem in the United States. As of 2021, the total student loan debt in the country exceeded $1.7 trillion, and the average student loan borrower owes over $30,000. This debt burden not only [...]

An abundance of people are able to account fond memories of their childhood, recalling how exhilarating it was to ponder what they aspired to be when they grew up. Ambitiously born young desired to become Mr. or Mrs. President [...]

College debt has become an increasingly pressing issue that affects millions of students and graduates across the United States. As the cost of higher education continues to rise, many individuals find themselves grappling [...]

This research paper consists of five published articles that describe higher education due to student loans. The articles explain and point out several different problems for student loans. However, other articles will talk [...]

Related Topics

By clicking “Send”, you agree to our Terms of service and Privacy statement . We will occasionally send you account related emails.

Where do you want us to send this sample?

By clicking “Continue”, you agree to our terms of service and privacy policy.

Be careful. This essay is not unique

This essay was donated by a student and is likely to have been used and submitted before

Download this Sample

Free samples may contain mistakes and not unique parts

Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.

Please check your inbox.

We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!

Get Your Personalized Essay in 3 Hours or Less!

We use cookies to personalyze your web-site experience. By continuing we’ll assume you board with our cookie policy .

• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free

Home / Essay Samples / Life / Student Loan Debt / Student Loan Crisis In America

Student Loan Crisis In America

• Category: Government , Life
• Topic: Crisis , Financial Crisis , Student Loan Debt

Pages: 3 (1178 words)

Views: 1896

• Downloads: -->

--> ⚠️ Remember: This essay was written and uploaded by an--> click here.

Found a great essay sample but want a unique one?

are ready to help you with your essay

You won’t be charged yet!

Empathy Essays

Courage Essays

Inspiration Essays

Fear Essays

Hope Essays

Related Essays

We are glad that you like it, but you cannot copy from our website. Just insert your email and this sample will be sent to you.

By clicking “Send”, you agree to our Terms of service  and  Privacy statement . We will occasionally send you account related emails.

Your essay sample has been sent.

In fact, there is a way to get an original essay! Turn to our writers and order a plagiarism-free paper.

samplius.com uses cookies to offer you the best service possible.By continuing we’ll assume you board with our cookie policy .--> -->