4 page research paper (Argumentative Persuasive)
budsimpson
Essay3RoughDraft.docxYettke 2
Cassandra Yettke
Lara Alvarenga
English 1301
27 July 2019
Research Project
Student Loan College debt is the highest in history. The increase in the number of people applying for loans, unemployment, and tough economic times have seen the student loan college debt increase over the years. There is a big difference between the rate at which loans are being disbursed and the rate at which loans are being repaid by the students, which explains the rise in the debt over the years. Student loan debt is rising to 1.5 trillion nationwide. The highest it has ever been in history. An increasing amount of student loans are starting to out-price the tuition itself. In order to improve graduate success after graduation which also correlates to an improved economy, student loan debt should be reduced or eliminated
Student Loan Increasing Interest is furthering put students in debt. When joining college, many students apply for a loan in order to pay their tuition fees and to meet their basic needs. The Federal government started disbursing student loans in 1965, a move that was seen as an incentive for students to further their studies. Despite the effectiveness in disbursing the loans to the students, the debt to the students is becoming increasingly high over the years. As of 2019, the average student loan total debt in the US is $28,000. Law school, Medical School, and Private School have the highest amount of debts (Eisler et. al, 383). The total amount of borrowers in debt in the US is 44 million and the students have contributed to a significant percentage of this debt. Given the high cost of living and the levels of unemployment, many former students are finding it difficult to make the payments, which raises the question on the strategies that the government needs to employ to reduce the increasing debt of the students.
Student Loan Debt is starting to out-cost the original tuition. When the loans are disbursed to the students, the federal government expects the students to pay off the loans after they graduate with the assumption that they will get jobs once they graduate. When students fail to pay the loan after the agreed time, it accrues interest. Due to the rising interest and late fees, student loan debt keeps borrowers in a continuous circle of debt. Currently, there are students who pay their loans for close to more than five years due to the interest that has accrued (Haultain, et. al, 329).
The assumption by the government that graduates will land a job once they have completed their college education is one of the factors that has led to an increase in student debt over the years. In the current business environment, the job vacancies are becoming increasingly competitive, and market forces in the labor market are forcing graduates to take up entry-level positions that are low paying in fear of being unemployed. Graduates entering the job field generally start at an entry-level position which put paying back loans increasingly difficult. Once a graduate gets a job, they have financial responsibilities, and paying back the student loans becomes a burden. In addition to the low pay for the entry-level positions, it is important to note the challenges that graduates face after graduation in employment. Currently, there are no employment opportunities that can absorb all the graduates, which means that there is a percentage of graduates who do not get a job and they must learn other skills or start their businesses. By the time the businesses break even, or they get a job, they are usually in their thirties and the accrual of the interests over the years makes it challenging to pay the loans (Haultain et. al, 329).
The above-mentioned factors have led to an increase in student debt over the years. Regarding this issue, there have been questions on some of the solutions that the government needs to adopt in reducing the student debt. One of these strategies is the elimination of student debt would be like the banking and car industry bailout. If a graduate does not get a well-paying job or a job at all, then it implies that chances that they will fully pay their loan are minimal. The government should, therefore, pay off the student loans to reduce the financial burden of the graduates. Just like how the government bails out some companies, it is important that it considers the welfare of the graduates who are unemployed or are in entry-level position jobs. Alternatively, the government can also adopt a policy where it can pay off a certain percentage to the graduates who are in entry-level jobs. This way, the government will have reduced the amount of debt that the students owe to the government (Burdman 93).
With the increase in inability by students to pay their loans after graduation due to difficult economic times, the government needs to create a strategy that will ensure that students do not struggle to pay off their loans in the future. One of the strategies is by introducing the free tuition policy. The free tuition policy is an effective policy that will see the government set aside funds for tuition for college students, which reduces the need for the students to apply for a loan. Countries such as Norway, Finland, Sweden, Germany, Slovenia, and France have free tuition, and they are outperforming the US in terms of their economy. Research shows that free college tuition has setup graduates to be more productive in the job field after college. The government aims at improving the economy by increasing the workforce with a diverse set of skills and knowledge in a different area. With the free college tuition fee, many graduates will enter the business environment where they can apply their knowledge and skills, thus increasing productivity and economic performance. The burden of loans affects the productivity of an individual and their willingness to venture into entrepreneurship. With free tuition, graduates can easily create employment opportunities without having to worry about student loans (Nica, Elvira, and Cătălina-Oana Mirică 68).
In conclusion, an increased amount of student debt will only weaken the US future but also the economy as well. Free tuition and the elimination of student loan debt will only help the nation. In order to improve the future of this country, education should be low cost and debt reduced. As it stands, there is nothing much the government can do for the graduates with outstanding loans except for the penalties and increased interest fees. The free tuition policy will be a great way to encourage more students, which will increase the workforce and increased levels of productivity.
Works Cited
Burdman, Pamela. "The student debt dilemma: Debt aversion as a barrier to college access." (2005).
Haultain, Steve, Simon Kemp, and Oleksandr S. Chernyshenko. "The structure of attitudes to student debt." Journal of economic psychology31.3 (2010): 322-330.
Nica, Elvira, and Cătălina-Oana Mirică. "Are Increasing Student Loan Debt Levels Burdening Graduates?." Journal of Self-Governance and Management Economics 5.2 (2017): 68.
Friedman, Zack. “Student Loan Debt Statistics In 2019: A $1.5 Trillion Crisis.” Forbes, Forbes Magazine, 3 June 2019, www.forbes.com/sites/zackfriedman/2019/02/25/student-loan-debt-statistics-2019/#39ea9581133f.
Ulbrich, Timothy R, and Loren M Kirk. “It's Time to Broaden the Conversation About the Student Debt Crisis Beyond Rising Tuition Costs.” American journal of pharmaceutical education, vol. 81,6 (2017): 101. DOI:10.5688/ajpe816101
Fox, J., & Montalto, C. (2017). College Student Debt and Anticipated Repayment Difficulty. Human Development and Family Studies Publications , 47(2), 111-135. Retrieved https://lib.dr.iastate.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=1051&context=hdfs_pubs.
