The Problems Related to Student Loan Debt

Student Loan Debt – the fear of many young adults that are going to proceed their education and attend college/university. As you begin high school you are introduced to the world of being a young adult that comes along with many responsibilities and a glance of what your future might await academically meaning your college or university of choice. Although, the tuition may be very expensive, some students have the advantage that they don’t have to worry about it but there will always be others that don’t have it so easily. Which can be a problem because even if there is student loans that means you will have debt and just because of that reason many students would rather not attend college or take out student loans. What exactly student loans and financial and what requirements do you need to qualify to be able to obtain it. Also, people across the income, age, and educational attainment spectrums have student loan debt, but it is particularly concentrated in some groups. There are many other problems that the debt causes like depression, anxiety etc. because students/graduates are worried about how they will pay it off which can lead to mental health problems that can affect permanently.

Firstly, a loan offered to students which is used to pay off education-related expenses, such as college tuition, room and board at the university, or textbooks. Many of these loans are offered to students at a lower interest rate. In general, students are not required to pay back these loans until the end of a certain period which usually begins after they have completed their education. Students who would be most likely to receive financial aid are those who have good grades in high school, and standardized aptitude test scores. Depending on who someone is working with for their financial aid they would have the special requirements they need to meet their expectations to be able to receive help. Which would later be paid by their rules with interest or no interest or just depending on the help someone is getting.

Secondly, when high schoolers are in the beginning process of finding the possible college they will be attending. One of the many things high schools have to offer to the students having the ability to sign up for financial aid (student loans). Although it is pretty great if you get the financial aid many students start to realize that, that loan will turn into debt and if they don’t want to be in debt in the future they will most likely not want to attend college anymore as seeing the outcome of the financial aid especially low-income students since they do not want to be left with that burden. One source said “Surprising numbers of low income students – 850,000 a year, or 26 percent, according to the American Council on Education – don’t apply for federal aid at all ...these students are eligible for more need-based grants plays a role, as does their tendency to attend lower-cost institutions. But debt aversion may also play a role, particularly when it explains the choice of a low-cost institution in the first place”.

Thirdly, when it comes to the student debt it’s not just graduates who are left with the debt there is certain groups. An article by the Urban Institute on who has student loan debt they said “The 20 % of U.S. adults age 20 and older who have student loan debt are a varied group: young and old, white and nonwhite, men and women, low income and high income, college educated and not. The likelihood of having student loan debt does, however, differ significantly across these subgroups.” These subgroups being; Education, Income, Age, Kids, Gender, Living arrangement, Employment and Race/Ethnicity.

So who has student loan debt? Based on age the people with a higher percentage that have student loans range between the ages of 20-29 and 6 percent of people that are 60+ years old still have debt. On an education level the most probable people that would have student debt are people with a higher education than high school and people with a College Degree since they attended all the years necessary to graduate the more loans they needed the more debt they would have, on a percentage they are 30 percent of people that have student debt if they obtain a higher education. “Overall, 27 percent of Americans with at least some college education have student loan debt, with the numbers ranging from 56 percent of 20–29-year olds to 6 percent of those age 60 and older higher from any other education received….African Americans and Hispanics are about twice as likely to have student loan debt as whites. While 16 percent of whites have student loan debt, 34 percent of African Americans and 28 percent of Hispanics do so.”

College students encounter a series of complex financial decisions as they determine how to fund their college education and the impact that financial concerns have on these students is uncanny ranging from anxiety, depression, stress etc. “High levels of debt have a negative psychological impact on college students. Lange and Byrd (1998) found that high debt levels were associated with lower self-esteem and a decreased sense of ability to manage personal finances” says an article talking about financial anxiety. As you go through certain points/stages of your debt depression will come and make you undergo a terrible feeling like you are never going to be able to pay it back and you feel hopeless. “These thoughts can have detrimental effects on borrowers with debt affecting mental health as well as hindering their repayment progress ...Student loan borrowers may be worried about how they will pay it back, how their loans affect their future goals, and their current reality. It can feel totally overwhelming to manage the day-to-day expenses of life on top of hefty debt payments.” Not just any students/people are the ones most concerned about student debt but people with a low-income they have more to worry about. If they are not gaining enough money to support themselves and pay off debt it cause more stress and people who actually have a high-income pay. “People in lower-income households are substantially more likely to have concerns about their ability to repay their student loans. Compared with people in households with incomes above $100,000, people in households with incomes below $25,000 are 86 percent more likely to worry about repaying their student loans. The concern is nearly as great for people with incomes between $25,000and $50,000; they are 72 percent more likely to worry. In comparison, those with incomes between $50,000 and $100,000 are 29 percent more likely to worry about student loan repayment than their counterparts with incomes above $100,000” mentioned the article by the Urban Institute.

By all counts, and with proven results, although student loans/financial aid are great opportunities that are very much helpful for the help of gaining a greater education. In the long run, you are still left with the debt and overwhelmness of paying it may be because of a low-income, the age that you are at that isn’t your best it can cause some physiological problems when you are left with the concern of paying off your debt which can cause anxiety and stress.