Student Loan Debt Struggle in The United States

“By making college unaffordable and student loans unbearable, we risk deterring out best and brightest from pursuing higher education and securing a good-paying job.” - Mark Pocan. Rising costs of postsecondary schools are causing students to require federal or private help called “student loans.” This is where the government, or a private provider, sends a student money to pay for their education, but eventually is repaid with interest from a payment plan. Many people, especially in the United States, use student loans to go to college. After the students graduate, they are usually left with a lot of debt, or money needed to be paid back. In the United States alone, there is over one trillion dollars worth of student loan debt, and this is a problem.

As time goes on, there is usually a large change between the start and end date. For the past decade, this statement stands true for student loan ideas. Although the interest has settled to a specific rate, the financial aid has had extreme adjustments since the late 1900s. “By 2010, a maximum Pell Grant wouldn’t cover over 40% of tuition, room and board at a public 4 year college. Federal Financial aid by grants dropped 29% from 1979 to 2007, even as student loans’ share of financial aid rose 25% between these years”. The drop of repayment-free grants dropped while the student loans that need to be paid back rose drastically. This is in consideration with the college costs. The greater amount of student loans handed out, means more debt on the shoulders of the student and family to pay later. The grant statistic dropping from 55% to 26% is alarming and would help many people keep out of the reach of borderline bankruptcy. The rise from 39% to 64% on the loans also means that more people cannot pay the college fees alone, and are becoming more desperate to fulfill the American Dream of having a college degree, and a great-paying job. Most of these people end up struggling later when they have to pay back these funds.

The Grant vs. Loan change isn’t the only difference, however. The limitations from student loans are judged by the Graduation or Payment plans you have for college. There are three basic graduation plans that differ from one another. The first is the “undergraduate dependent,” these are the ones that do not plan to graduate with a master’s or doctorates, which are also depending on another person to help pay their fees. The second group is the “undergraduate independent,” which is the same as the previous group, except they are paying their dues alone. The final group is the “graduate.” These students are the ones striving for a master’s or doctorate degree, thus needing a lot more funds for their education. The statistics for these groups are as follows. “Federal Loans Disbursed in 2013-14: Undergraduate Dependent: 28% - $24.9. Undergraduate Independent: 34% - $30.1. Graduate: 38% - $34.4. The graduate students make up a total of 14% of American Students. The total amount of student loans was $90 billion, sent by the federal government on the scholastic year of 2013-14”. The differences between your payment plan can cause a person to need more or less money’s-worth of student loans. Graduates needed $34 billion to get through one school year. This all adds up quickly when it comes to debt! The Undergraduates both have the same set interest rate, but Independent students have to pay almost twice as much! With the combination of graduation/payment plan and the specifications of the plan for the loans, there are a lot of things that could change within the very idea of a student loan, never mind the debt following it. These statistics are increasing one’s debt as they go along with getting a simple degree.

Everyone knows when there is money involved, the United States Government is not going to be too far behind. With the actual loan, comes the interest rate and payment plan, and since the government has noticed the incline of debt, they tried to do something about it. “Beginning in mid-2006, Stafford loans will have a fixed interest rate of 6.8%”. This plan made by the government only lasted for a few years before a new one was plotted. “The economy shifted and interest rates fell sharply, until a point where 6.8% didn’t seem like the best deal. Then, in the 2006 campaign, the government tried to fix the newly born problem. “Some Democrats promised to cut student loan rate in half, to 3.4%. Student loans were now able to be spread out to more of the American People, but had emerged as a campaign issue”. The government, trying to help, set a fixed interest rate. Before 2006, companies would make the interest rate based on the person and their profile. Since times have gotten harder, and college more expensive, the government tried to lower a few problems by lowering the interest rate. This was beneficial for being available to more people, but also cause more debt in the outcome. The positive out of this was that it was less debt per person, but more people getting these loans/debt.

From the interest rates to the set laws, the Government continued to try to help the American people with their leftover bills. “A growing proportion of the student body started to face vast debt, and the policies chosen to take the weight off their chest seemed to only be short-lived solutions”. Since there were more students wanting to go to college, the debt quickly increased, causing problems for America. The Policies that were once set were, in a way, only a temporary fix. These rules didn’t fix the situation long-term and caused more problems after a while. The future years and college participants would be left with more and more debt, mainly because of the rising college costs. Overall, the Government keeps a close eye on student loans and debt and is trying to help in any sense that is possible. This is especially the case for the future generations of students with college price-tags getting larger.

People always complain about the cost of college, but we usually think of it in present tense. The future is much more difficult when majority of people can’t pay off their student loans in the recommended 10 years. Because of the rise in university expenses, there are more loans that students-to-be are going to need. The quote from “Student Loan Debt Statistics in 2018 - Student Debt Relief” by Sarah Goldy-Brown shows the most current statistics on the debt problem. “Total Number of Borrowers: 44.7 million. Total Remaining Student Loan Debt: $ $1.569 trillion. Amount Borrowed Each Year: $105.5 Billion. Percentage of College Grads with Debt: 71%. Average Debt per Graduate at Graduation (2017): $28,500. Delinquent Loans: 11.4% of aggregate student loans debt of quarter 4 of 2018. Defaulted Student Loans with Private Collection Agencies: $113.3 billion as of quarter 4 of 2018”. Millions of borrowers having $1.569 trillion student loan debt is caused solely by the rising college costs. Once the price for this education rises, all of these other statistics would rise with it.

While people are trying to pay off their loans, they have to have a job in order to complete the payments. Some people can’t get a stable job in order to survive and pay the loans, eventually getting behind. “Information from the New York Federal Reserve tells us borrowers ages 39 and under have the highest total student loan balances. This would theoretically pay off more debt as time goes on. However, the debt wouldn’t be an affair for young adults. As of 2017, nearly 3.2 million people aged 60 or over were still paying off their own debt - three times more than there was about a decade ago. For this grouping, the total loan balance is $845.4 billion. Although it is the least amount unpaid by any age group, it is evidence of the long-lived burden”. These facts show how much that, even the elderly, have to deal with concerning their funds. Although the government set the 10-year plan, not a lot of people are usually able follow it. Considering that when people go for a 4-year educational plan, they usually take five to six years, this is quite considerable. Rising costs for college, interest, and paying jobs all make things difficult for a person to pay off their debt. If any one of these things were to have a negative outcome, many others wouldn’t be able to finish their payments within the 10-year rate.

As plenty of people learn that they have thousands of dollars-worth in student loan debt, they realize it has become a large source for concern in the United States of America. With the government involvement of student loans trying to help people that cannot pay off their debt in a timely manner, and the large change from debt amounts in the past decade, there is a clear reason as to why this conflict would be worrisome. Not only is it hard for students and/or adults to pay off their student loan debt, but it can also hurt their future. This is why student loan debt needs to be taken seriously and discussed as a problematic form of conversation. If we don’t, the whole country will forever be in debt, and we will never live a peaceful life sufficing the American Dream.