Benefits of Student Loans and Debt for Colleges and Students
In today’s society, it is almost impossible to successfully achieve an education without some type of aid or student loans. Student loan debt is increasing, due to the total cost of universities increasing their tuition fees. Once students start to graduate, they have what is known as a 6 month grace period, where student loans do not have to be paid back until that 6 month date is reached. Then, whether the student has found a career, they have to start making payments. The problem is now that they have to start paying these loans, which most likely equal a mortgage payment, it is almost impossible to get on their feet. Now if they want to live on their own after college they have a mortgage, or rent, car payments, expenses of living, and student loans payments. Then they find out the job they landed after college cannot keep up with the way of living. The system is setting up to cause failure, for those who choose the college path. This is all supported by the Trends in Student Loan Debt by Mark Kantrowitz, and Student Loan Debt and Why Student Loan Debt Can Be good by Katie Brazis. Are student loans impacting students in a positive way, or is the system corrupt.
In the Trends in Student Loan Debt by Mark Kantrowitz. Kantrowitz points out that the increase in the net price of college, without a concurrent improvement in family ability to pay for college, forces families to focus more on college affordability. They say some families have to alter enrollment from private non-profit colleges to public colleges, and from four-year colleges to two-year colleges (Kantrowitz, 2019). Other families respond to the increase in costs by borrowing more, since student loans are the only form of financial aid with any degree of elasticity (Kantrowitz, 2019). The expense of college tuition does not allow families to consider other options to pay for college tuition besides loans. The Decline in college affordability have forced low-income students to enroll in less expensive colleges and degree programs, leaving the wealthy handful of students to attend four-year colleges. Statistics show that wealthy students are more likely to graduate from college than low income students (Kantrowitz, 2019). They say the steady growth in outstanding student loan debt occurs because student loan debt is continually refreshed with new borrowers each year (Kantrowitz, 2019). New borrowing exceeds the progress in paying back student loan debt because student loans are repaid over decades, not months to years like credit card debt. Most college graduates can afford to repay their student loans. Student loan debt is affordable if the borrower can afford to repay their student loans in a reasonable amount of time (10 years or less), with loan payments that are less than 10 percent of gross income.This corresponds to total debt at graduation that is less than the student’s annual income. If total student loan debt exceeds annual income, the student loan debt is considered excessive (Kantrowitz, 2019). It is also said when student loan debt is not in sync with income, the borrower will need an alternate repayment plan, such as extended repayment or income-driven repayment, to afford the monthly loan payments. When applying for student loans, the student most of the time needs a cosigner (Kantrowitz, 2019).
The argument is strong and effective because based on the research the data shows that the percentage of bachelor’s degree recipients who have graduated with excessive debt has increased in the last three decades (Kantrowitz, 2019). I agree that debt is increasing dramatically, and there is data to support this. This is showing that the more people graduating with bachelor’s are beneficial and increasing. This is projecting the trend forward suggests that about one in six bachelor’s degree recipients are now graduating with excessive debt (Kantrowitz, 2019). Data also shows how enrollment shifts from more advanced degrees to less advanced degrees according to income. The decline in bachelor’s degree attainment by low-income students can be explained by this shift in enrollment patterns (Kantrowitz, 2019). I believe that low income students already struggle with making the choices of getting a degree because they don’t want to struggle more financial. That when individuals struggle with decided attempted to gain a high educational degree with the outcome of loan debt, and the potential of not finding a good job once graduate. I personally know many people who have struggles with no being able to find a job after college, to support their living situation and debt. The total undergraduate student loan debt for bachelor’s degree recipients at graduation, including federal and private student loans, but excluding parent education loans (Kantrowitz, 2019). The charts are being based on an analysis of data from the National Postsecondary Student Aid Study, based on a large quadrennial survey with geometric interpolation and projection in between NPSAS years (Kantrowitz, 2019).
Although, student loan debt has increased, the counter argument are that the student loan process is also beneficial, much like Katie Brazis explains in her journey entry, Why Student Loan Debt Can Be Good. Brazis was able to see express that simply having a degree will broaden your employment opportunities (Brazis, 2019). In fact, it is said that about two-thirds of jobs these days require a college degree. And, according to PEW research, they say that “one-third of Americans without a bachelor’s degree have elected to not apply for a job they felt they were qualified for because it required a four-year degree” (Brazis, 2019). A college education has a range of academic rewards, you will have access to a greater range of careers than you might have considered at first. It’s brought to the reader’s attention that when applying for jobs the list of degrees that are acceptable for the job title can range from multiple different types of degrees. Any of those options would work for the company. It’s not a one-to-one correlation between degrees and jobs (Brazis, 2019). They say with the greater employment opportunities comes greater compensation potential. In other terms, this part is key for many people in determining the worth of the college experience. If you can earn enough money because of the degree to pay for the degree and more, then the return is monetarily greater than the cost. Therefore, most student loan debts are worth the investment (Brazis, 2019).
Student loan debt can be beneficial because a college education is meant to benefit you throughout your life and career. It’s supposed to get you ahead, not only in earnings but in opportunities. How much you value it is up to you, but you should be able to agree that you would likely not be where you are today if not for your student loan debt (Brazis, 2019). I agree that it is hard to better yourself in today’s society without a higher educational degree, but I do not agree that college is the only way to do good in today’s society. College is certainly not for everybody. The most important outcome of student loan debt is the happiness from healthy habits, feeling financially secure, or feeling challenged at work, think of your degree as a means of happiness. According to reports, 51% of workers age 30–45 with a bachelor’s degree or higher are satisfied with their work (Brazis, 2019). Compare that to 47% with a high school diploma and 42% with less than a high school diploma (Brazis, 2019). I don’t fully agree that the educational process is full of happiness. The college experience is stressful, and once graduation approached the stress of debt is now on the shoulder of that student. But other benefits that come from student who attend college and have an outcome of student loan debt have been know to be less likely to smoke, more likely to exercise, and less likely to be obese when compared to people who only have a high school diploma (Brazis, 2019).
So the thought before of are student loans impacting students in a positive way, or is the system corrupt, it is understood that student loans are almost the only way most students can attend college nowadays. The government has made it possible that students can receive loans and grants, and will have a small grace period after graduation, until they have to start paying back the loan. Although these student loans are helpful, and allow students to better their education, it is dramatically increasing the tuition and fees charged by colleges, which in turn has forced more students to take out these loans. Okay, but not only is it increasing the college tuition rates, but it is increasing the debt that students are stuck paying once they encounter graduation. Given that over half of all recent college grads are unemployed, the default rates are expected to rapidly rise. Evidently the increase in the number of student loans is much like the mortgage crisis, leading to an economic bubble where tuition keeps rising and school administrators are unaccountable. Although the student loan debt is a major debate in society, the educational aspect is beneficial to the students being accommodated for their needs.
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