Student Loan Debt Is A Financial Crisis - 1700 Words

As the demand for workers with college degrees increases the pile of debt students may graduate with gets bigger and bigger. This problem is America’s next sizeable financial crisis, but this crisis however is avoidable. Student loan debt is a financial bubble waiting to blow up just as the housing market collapse did in 2007, which the country is only just now starting to see signs of recovery from. The cost of a four-year degree has seen increases that surpass inflation and health care costs. Likewise, the amount of student loan debt is now greater than both auto loans and credit card debt. So, the question most frequently asked is, how has this happened? In 1965, the President of the United States Lyndon Johnson signed the Higher Education Act of 1965. This allowed for many things needed in the higher education system, one of them being low interest loans to students who need financial assistance to get through college. This is where the debt problem begins, but does not g et out of control until the most recent past decade. Some of the drastic increase of debt can be contributed to more people going to college, but can also be contributed to state schools receiving less money from their respective states and needing to raise tuition and all other fees to cover the difference. Schools do have other justifiable reasons to raise rates as well, such as utilities, upgrades to the campus upon requests of the student population, employee wages, no one is willing to workShow MoreRelatedHow The Student Loan Debt Crisis Is Undermining Economic And Social Progress Of American Graduates1635 Words   |  7 PagesHow the Student Loan Debt Crisis Is Undermining the Economic and Social progress of American Graduates Currently, higher education is highly valued as a step in achieving success and earnings potential, but attaining a degree comes at a high cost. Although a very valued asset, the cost to attain a college degree for most students includes getting loans, grants from the government, and sometimes even private loans. Most of these loans come at a high price for students as the interest structure forRead MoreThe Nationwide Student Debt Crisis967 Words   |  4 PagesFact or Fiction: The Nationwide Student Debt Crisis In the United States, it is generally accepted that college (or any form of higher education for that matter) is a wise investment that each and every individual should strive for. Each and every year thousands of parents open college funds and future investment plans to ensure that once their child is of age he or she can participate in quality educational programs. While college attendance rates are at a positive all-time high, right behind itRead MoreStudent Loan Debt Crisis Essay1214 Words   |  5 PagesStudent Loan Debt Crisis 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 recessionRead MoreThe Financial Crisis Of 20081326 Words   |  6 Pagesslowly incorporating direct federal loans but still keeping guarantees in place for the banks. After the financial crisis of 2008, President Obama completely eliminated the middleman and fully implemented direct student loans (Kingkade). Although this stopped large banks from profiting off of government backed loans, it still didn’t reduce the supply of loans or the ease of obtaining them. 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Despite the increased length in loanRead MoreStudent Debt Crisis And Its Effects On The Economy1586 Words   |  7 Pagesstudent debt crisis has reached an all time high with debt reaching a total of 1.3 trillion dollars across the United States.With tuition cost increasing,lack of scholarships and unpaid back loans,student debt will continue to increase even higher.The enormous amount of debt put upon each student creates the inability of those students to help the economy grow.Our economy as we know it is a loop and decreasing the student debt significan tly will help the economy grow.Instead of putting that moneyRead MoreStudent Loan Crisis1592 Words   |  7 PagesStudent Loan Crisis Beginning in the 1960’s the distribution of federal and non-profit funds have given students all over the United States the opportunity to pursue post-secondary educations. Although this method has given students the ability to go to college financially, the majority of the students are not able to pay the money back when finished causing debt. Currently students in the United States owe more than $1 trillion dollars worth of federal and private student loans. Surprisingly thisRead MoreStudent Loan Crisis Is A Crisis870 Words   |  4 Pagesthousand dollars in student loans. (Johnson, â€Å"Student Loans†) There is currently a debate about whether or not student loans are a crisis or if this crisis is just a myth. In the article, â€Å"Here’s Your Crisis: Student Loan Debt Isn’t A Myth,† it describes how student loans are a huge crisis, and the article, â€Å"The Myth of the Student Loan Crisis† is about how college students’ loans do not amount to a crisis. The student loan crisis is a legitimate problem, not a myth. College students do not realize theRead MoreIncome Share Agreements ( Isa )1169 Words   |  5 PagesWith student loan debt becoming increasingly worse year after year, new and potentially better avenues for students to finance a college education are emerging onto the market. In particular, income-share agreements (ISA) have appeared on the scene for a few years now, but not have attempted to modernize the way students pay for college. The big take away from ISA’s is the shift of financial risk from the student to the investor, unlike the traditional government or private loans. A student promisesRead MoreSolving The Student Debt Crisis Essay1609 Words   |  7 PagesThe student debt crisis has reached an all time high with debt reaching a total of 1.3 trillion dollars across the United States.With tuition cost increasing,lack of scholarships and an increase of government loans,student debt will continue to increase.The enormous amount of debt put upon each student creates the inability o f those students to help the economy grow.Our economy as we know it is in shambles and decreasing the student debt significantly will help the economy grow.Instead of debt owers