Henry 1 Angel Henry John Kubler English 114A 15 November 2013 Student Loans Something Needs to Change Just

about every child in the world was told, when they grow up they should go to college so that they can have a job they love and to have a happy life. Most teens do end up going to college by filling out the FAFSA, applying for scholarships, students that go to college take out a loan and after college they end up in debt, in which it starts affecting the economy and their lives. They do everything they can to afford college but no one told them what it would be like after graduating. More than half of the people who graduate have more than 20,000 dollars in loans that they owe. Eventually these people go into debt mainly because most people dont have a job that gives them enough money to pay their bills and their loans. Overall, the student debt all together is about a trillion dollars. Many people believe that the government should not bail these graduates out, and then theres the people who think its unreasonable that anyone should be in debt after trying to get an education. If the government was to relieve the trillion dollar debt it would add even more problems to the pile that they cannot handle. The government needs to realize they have to find a solution to this debt crisis. If the government was to take away the burden of debt from students it would actually be a terrible idea. Richard Vedder in the article Forgive Student Loans said students want the taxpayer to foot the bill for their years of limited learning and heavy partying while in college.(Vedder 1) The government shouldnt have to pay for students who went to college and mainly partied throughout their college life. Vedder believes that these students are just looking for an easy way out. Instead of trying to pay back everything they owe. He feels that since they

Henry 2 took these loans out they should have been responsible. The main issue he was trying to show was that if the federal government shoulders the entire burden, we are adding a trillion or so more dollars in liabilitiesleading to more debt. (1) The government shouldnt have to take on these people problems. When an undergraduate takes out a loan they need to know what they are getting themselves into. If they knew they were not going to be able to handle the payments they should have never took out the loan. Furthermore, loan forgiveness is a bad idea especially because there are students who have worked hard to pay off their loans. A bailout wouldnt be fair to them. Although, the government does not have to take on the burden of the student loan debt, congress can come up with alternative solutions. In the article Student Loan Debt should be treated like Detroits Tim Donovan talks about how Detroit can resort to Chapter 9 protection as a last resort to avoid their creditors. (Donovan 1) Anyone can file for bankruptcy for just about anything including gambling. Likewise, there shouldnt be anything wrong for students to file for their loan debt. It might seem like for a former student to file for bankruptcy is an easy way out but some people actually need the help. Yes these graduates took out bad loans but they needed the money. Donovan is certain that in order to get rid of the debt crisis, let students have a lastditch salvation from the turbulent waters of crushing, overwhelming debt. Until then the debt will keep piling on top of each other. People have a hard time paying their loans and their bills. Filing for bankruptcy can give them time to get their act together. On the subject of having an alternative, Oregon, a proposed pilot program would allow students to attend state college tuition-free. Martha White wrote an article Oregons Pay it Forward Program says that students agree to pay the state back a small portion of their income over the course of a couple decades.(White 1) Instead of taking out huge amounts of loans they would pay it all back from their income. This would be a better alternative for student loans because then no one would really be in debt. They would just pay it back with little portions of

Henry 3 their income. Technically it is like a loan because some of the paycheck would go to paying off loans, but it wont be a huge amount. White talks about how they figured out how much to take from their income, and that would be 0.75% of the repayment for a year. For example, if the student was to get a bachelors degree it would be 3% of their income for about 25 years. Even though it would take a long time to pay back, that would be better than being in debt. Both of these ideas are not bad considering that no one would really be in debt or they would be able to file for bankruptcy. My sister Aprs Harrison graduated from CSUDH in 2011 and got her bachelors degree in business. She took out a loan that in the end totaled as 21,000 dollars. Ever since she has graduated it has been hard for her to get a job so she filed for a deferment, which basically allows her to temporarily postpone or reduce your federal student loan payments. Mainly until she finds a good job to help her pay them off. She doesnt regret taking the loans out because she needed them in order to get that degree. The only thing she egrets is that now she is 21,000 dollars in debt and if it wasnt for the deferment it would be worse. She is really thankful for that, it hasnt messed up her credit yet but she did end up moving back home until she can get her own place and a better job. Since she is in deferment its not like in 3 years she will have to pay the interest rate and the 21,000 she will only have to pay what she borrowed. As of right now my sister does believe it was all worth it mainly because she says its even harder to get a job without a degree. There are people that believe helping out students with debt is a terrible idea. Donovan even says bankruptcy is just an easy way out for college students to get rid of their problems. Even though he might be right why shouldnt they let them file for bankruptcy, they let gamblers file for it and they might not even have a college education. If someone is trying to have a better life then they should get some kind of help. Vedder thinks they want the taxpayer to foot the bill for their years of limited learning and heavy partying while in college.(Vedder 1) Which that just isnt

Henry 4 true, not everyone that goes to college is all about partying. Most students know that they are paying for their education and are trying to stay focused and not wasting time. Student loan debt is a big problem and its process really needs to change. It isnt fair that these people have been out of college for years and still paying back their loans barely being able to have a decent living. The government doesnt have to forgive them but they can come up with some type of alternative. The government has bigger problems to worry about other than student loan debt. Yes there is a trillion dollar student debt crisis but there is also mortgage fraud in the stock market. There has been bad mortgage sales that have been going on and no one worried about in. In the documentary called The Untouchables that was broadcast on PBS.org Frontline, January 22, 2013, they talked about how Wall Street leaders have escaped prosecution for the fraud with subprime mortgages. The untouchables are basically the underwriters who looked at the loans to make sure the borrowers had enough income to pay off the loans. The regulators didnt take their job seriously because even if they did see something that looked suspicious they couldnt prove that it was fraud or their supervisor would say dont worry about it. The government has all these people that invested and they are really all bad mortgages. These people were being lied to and the government has to do something about it, its just too many investors. The government also has to worry about the weak housing market. Dan Kadlec in the article Student Loans Are Becoming a Drag on the US Economy says The number of new households is expanding again but remains stuck at 700,000half the peak level.(Kadlec 1) People are having a hard time trying to buy a house because they have bad credit or they just cant afford it. Since they are struggling its hard for them to contribute to the economy and this starts to impact the housing market. In reality, the government really does have a lot of problems an they cannot work it all out at once but they should work on the problems that hurt the economy the most, instead of forgiving student loan debt.

Henry 5 In this economy the government should not take the burden of the student debt crisis but should at least think of some type of alternatives. If the government was to go with Detroits idea with letting students file for ch.9 bankruptcy protection it could help them at least get their life together without having to give up half of their paycheck each month. Even if they was to agree to do Oregons pay it forward deal it wouldnt be like they were in debt they would just be paying for it by working. Forgiving the student loan would be idiotic but there has to be some alternatives because the government cant take on any more complications, they have other worries. We have people that have gone to college and graduated just like everyone always said to do, but why should they be struggling so much just because they was trying to do good for themselves? If this trillion dollar debt gets out of hand it will be a bigger problem than it already is.

Henry 6 Works Cited Donovan, Tim. Student Loan Debt Should be Treated Like Detroits. Salon.com. Salon Media Group Inc., 24 Jul. 2013. Web. 15 Nov. 2013. Kadlec, Dan. Student Loans Are Becoming a Drag on the Economy. Time.com. 18 Oct.2013. Web. 15 Nov. 2013. The Untouchables. PBS.org. Frontline, WBGH Education Foundation, 22 Jan. 2013. Web. 15 Nov. 2013. Vedder, Richard. Forgive Student Loans? Its the Second-Worst Idea Ever. NationalReview.com. National Review Online, 11 Oct. 2011. Web. 15 Nov. 2013. White, Martha C. Oregons Pay It Forward Program: Imagine College with No Tuition, No Loans, No Debt. Business.Time.com. Time Inc., 17 Jul. 2013. Web. 15 Nov. 2013.