Humphrey 1

Logan Humphrey

Ms. Hunter

English Comp. 2

31 October 2019

Student Loan Debt

Did you know the student loan debt in America is 1.5 trillion dollars? Student loan debt is

talked about heavily in our society today but have any of us stopped to really investigate it? I

decided to look into this topic because as a college student I will at some point need to take out

loans. Most of us taking these courses plan to further our education by transferring our credits to

another school, well once we get there it could become even more expensive and too much to

pay at first. We first need to educate ourselves on student loans and the debt it has creating for

many other Americans nationwide.

Society has been talking about student loans for years talking up the benefits of them but

has anyone ever really sat down and talked on the problems they create? Student loans come

with many problems but it’s the debt it leaves you in that really affects your life. They have

become historically high and when loans go up so does the price of education. The problem with

that is if you’re in the working- or middle-class range there won’t be any other way to pay for

schooling without a loan. Some loans will cost so much you won't even make that in a years'

time causing prolonged debt that affects credit score. Americans need to educate themselves on

loans and the debt it has created for people nationwide.

For decades students have relied on loans to help them get through school without

blinking an eye because it pays for the school with them being able to pay later. Well in the

article 5 facts about student loans they say “about one third of people ages 18-29 have student
 Humphrey 2

loan debt exactly 34% of adults have outstanding debt and it just keeps increasing the more

schooling you take”. College graduates are saying they struggle financially because of the loans

that they have out on themselves are so drastic. Most of these young adults take out loans end up

being higher than what most family incomes are. When you have so much debt graduates will be

less likely to value their degree.

Families also end up getting affected by student loans this being because when you fill

out your FAFSA they usually ask for your parents' information. Causing your family to fall into

debt for their children's schooling. The monthly student loan payment is $393 and 14% of those

people are the parents of students. An average amount parents end up paying is $35,600 and the

average middle-class income is $40,000 a year that is almost all of their money made in a year

being taken out on a loan. This can cause late payments on other bills or credit being affected

causing no additional loans to be taken out for things such as a car or a house. Schooling should

be lowered to an affordable paying wage.

Families feel just as much pressure as students do who take out loans. Many families

dream of sending their kids to college since early in the child’s life. While the parents dream of

this, children from every direction are being told that going to college is what success is in

America. This isn’t just affecting one race either families from all races experience the hardships

of sending their children to school. This is causing many students to start working in school to

help their parents pay off debt. Debt affects us all and learning about loan debt earlier in life can

help prepare each one of us in making better financial decisions.

There are many guides to trying to help Americans with not becoming in debt created by

student loans. One of those being Dave Ramsey’s Debt Free Degree where he teaches you all

about getting an education without taking out loans. He briefly discusses that parents should start
 Humphrey 3

saving for college when you’re born to improve the chances of not being in debt. Also, once

college is in the close future applying for as many grants, scholarships, and financial aid will

better the chances of not having to apply for loans. This all sounds simple but going to a

community college or a trade school helps to decrease the chances of loan debt. While all of

these things work even just budgeting and living off campus like at home with your parents can

save you money to pay off a degree.

According to Ann Carrns in The New York Times “the student loan rates will go up 5.05

as they are already 4.45 percent. This will make the rates for graduate students end up going up

by 6.6 and 7.6 for parents and graduate students.” Rates should remain almost the same, as loans

are needed to get through education and if students can’t afford to go dropping out and getting a

job is the answer. Now there is no degree and a loan is still being paid for. With the student loan

debt already being 1.5 trillion dollars, the amount of these rates going up is going to cause people

to be conservative on what loans these use in the first place or any at all.

Americas government should be changing what programs and school's curriculum

causing the student loan debt to be high. While schools speak on many topics' teens will face

such as tobacco use, and drug and alcohol prevention no one talks about loans for college. The

government is the one who regulates what school's curriculums should be, giving them complete

control to educate up and coming members of society. Yet things keep increasing every year and

schools stay the same.

Congress should be helping people more with making the student loan debt smaller or

creating a better program to reduce it but that’s not what's happening. House Congressional

leaders have released their initial tax reform plan giving student loan borrowers the short end of

the stick. Forbes magazine discusses ways Congress can help ease student loan crisis they say “A
 Humphrey 4

way Congress could boost not eliminate the loan interest deduction kind of like how a mortgage

interest deduction works. They should also make the loans interests closer to a prime rate this

shouldn’t be so expensive.” Congress does offer PSLF program this is a 10-year program that

forgives 100% of your debt if you work in a public service job should be essential because we

should be returning the favor for their service which is a way they do help.

One and nine will have taken a loan out and about one and ten people who take out loans

default on repaying them. There are multiple types of payment methods including balanced

based repayment, income driven, and income contingent. These are there to help people in

different situations like the balanced based payment method is there for people whose incomes

were raising faster than student debt. Borrowers pay less in the beginning and over time it

increases to compensate for earlier years. Income driven allows affordable payments based on

the borrower's income. Income contingent is for direct federal loans are eligible to be paid under

ICR which is one of the oldest and most expensive plans. Adam say the one downfall of

borrowing is “The cons are that even if the borrower gets a lower interest rate, they are walking

away from critical programmatic options and consumer protections”.

Most times students are taking out loans because they want to get a degree to earn a

living, so they can pay off their degree and save money. This isn’t usually how it goes causing

the middle class to not get enough money to pay off their degree and live. Article Does student

debt constitute a bubble that may bring about an educational crisis? Agrees and says “College

should allow access to the middle class and make certain former students gain enough money to

manage successfully” It only seems fair to do all that hard work to just not be able to make good

money off an expensive degree.

 Humphrey 5

With many upcoming 2020 presidential candidates one of the major topics has been the

student loan debt crisis. This is because forty-four million Americans have student loans debt

currently and there is only 327 million people living in the US which means that only 283

million Americans don’t have loan debt considering some of that 283 million are children. Both

Bernie Sanders and Warren are proposing bills to help eliminate this for undergraduates.

Problem being that the undergraduate programs people tend to not have to borrow for. Most

borrowing occurs from private schooling and most of all graduate students.

Many people don’t know the difference between a private loan and a federal loan

confusing the available payment methods available. A federal loan is a loan that goes through the

government personally and that’s who you’re paying back. A personal loan is going to be a loan

that is going through a private-sector lender. Be careful when deciding which is the best route to

go because both offer different benefits. A federal loan does not need your credit to matter but a

private loan will need you credit to matter or you will need a co-signer. While some federal loans

can be subsidized a private loan can qualify for a higher borrowing limit or a lower interest rate.

The student loan crisis should be taken more seriously as it’s in all of our futures at some

point. As, of 2018 the number of college graduates living in poverty is 3.6 million. Education is

supposed to provide a pathway to a healthy jump start on a career but instead it creates student

loans that can drown anyone. Student loans create a chain around some people’s necks that just

won’t let go so it drags everything down with it. This is causing credit scores to plummet making

it hard to get a place to live to approve you. Some jobs won’t hire if someone doesn’t have a

place to live and that is how student loans can easily affect someone’s life and how the poverty

rate for college graduates is so high.

 Humphrey 6

Student loan debt affects the lives of students who are still in school and the graduates as

well. Eighty-three percent of college graduates say that they can’t get a mortgage out on a house

because of outstanding loan debts. Loan debt shouldn’t affect getting a mortgage simply because

say a graduate gets a job that makes an income to provide both the loan and the mortgage

monthly payments with extra money to spare it should be allowed. This shouldn’t stop people

from getting their dream home due to a payment that is able to be made.

When someone takes a loan out, they will usually pay the perfect amount due but to make

it go down quicker paying more off every month will make it go away in no time. Cut back on

spending money on things like going out to eat or buying clothes that aren’t needed to help catch

up. Try getting a raise at work or looking for a higher paying job even make a side hustle to

make more money like fixing phones or for those who have a cosmetology license for extra cash

do hair or paint nails to gain extra cash. Getting that loan taken care of sooner rather than later

helps it not affect you as easily.

No one has ever stopped to ask what gender creates the most student loan debt? Well

surprisingly its women. Altogether women owe $929 billion dollars in loans at just the beginning

of the 2019 year that’s two thirds the amount of the total outstanding balance owed in the United

States. The reason for women owing so much is that women are the majority of bachelor degree

earners. Getting these higher education degrees is mostly because of the gender pay gap in

America making it harder for lower income earners to gather the extra money to pay off loans. It

will also create a stretched-out loan for those lower income earners, so they have more time to

pay it off.

Deciding a major should also come to mind when you’re thinking of student loans

because each degree is going to be different. All of the highest loan rates are majors in science,
 Humphrey 7

technology, engineering, math (STEM), Physical sciences, computer engineering, general

engineering, chemical engineering and computer science according to student loan hero. These

are the highest loan rates because they’re some of the highest paid jobs with the highest wage

being close to 70,000. While the lowest loan rates being law, pharmacy and education cause of

the post graduate degrees required afterwards. Some are measured at how good someone is at

the job required like law.

With all the negatives being talked about within society today it's hard to look at the

positives to student loans which is what it was created for. Federal loans were created to

originally help middle class families afford a college education in 1958 by the NDEA. As the

years continued it became something everyone needed helping millions afford college out

right without having to wait and save giving hope to student around the country.

Not everything with student loans is negative there are some benefits to taking loans out.

Like for instance when enough money is saved up to pay off loans quickly so it doesn’t turn into

prolonged debt. Some people even feel that the college experience I just worth it even with a bad

financial situation. Forbes magazine says that “61% of adults said that, even based on their

“current financial situation,” taking out student loans was worth attending college." A person's

financial situation doesn’t always ruin someone's experiences.

Being in debt can feel bad but if looked at as an opportunity to invest in a career then it

makes education worth it. Devin Delfino states that he feels “It's not like I don't understand how

much debt I'm in — I reported on student loans and higher education for over a year for work.

It's just that I think of those loans as a necessary investment in myself and my career.” Changing

the mindset of how loans are looked at can make them feel less heavy to carry. Planning ahead of

time can help as well to prepare for what is to come.

 Humphrey 8

Student loans can make higher education possible for those who do not have the funds to

go to said school. While also having a college, degree is almost always required when looking

for a successful career. Getting a good job with the degree obtained to pay off student loans can

build a credit history. The flexibility of paying back federal loans is also great because say

someone was to become unemployed the payments would pause until a job is inquired. While

private loaners can give flexibility, they generally don’t tend to be flexible and require payments

at every due date. Every lender can be different so educate on the different types of loans and

requirements for each before agreeing to it.

Loans can be tricky to pay off but when the positive side is looked at there is a way. One

way is the interest cost can go either way on federal loans the appeal of federal loans is that the

interest cost could be subsidized meaning the government pays the interest for you. It can also

end up with someone having the interest added to the loan balance. If a person can’t pay their

loan taxpayers end up paying for it comparing the different types of loans can prevent this. There

is also a forgiveness plan that was mentioned before that is a smart way to get loans paid off and

sometimes that its someone's profession of choice beforehand.

In conclusion student loans need to be looked at carefully to decide which if any loan best

fits each individual. This can affect family members like parents or guardians, women can be

drastically affected by it, and just about anyone can become in debt due to student loans.

America needs to pay attention and try to push governments to care more and change the ways of

doing things because it isn’t working. If all of us were to be educated on loan costs, interest,

what loans are out there, alternatives to them, the affects/debt created, and the pros to it all we

could understand what other Americans go through nationwide.

 Humphrey 9

This picture captures that student education carries a burden

of lots of cash weighing you down. If we all were to educate ourselves and plan more on student

loans, we wouldn’t feel so much pressure.

Work Cited

Carrns, Ann. “Student Loan Rates Are Rising. Here's What You Need to Know.” The New York

Times, The New York Times, 18 May 2018, https://www.nytimes.com/2018/05/18/your-

money/student-loan-rates.html.

Cilluffo, Anthony. “5 Facts about Student Loans.” Pew Research Center, Pew Research Center,

13 Aug. 2019, https://www.pewresearch.org/fact-tank/2019/08/13/facts-about-student-

loans/.

Josuweit, Andrew. “6 Ways Congress Can Help Ease The Student Loan Crisis.” Forbes, Forbes

Magazine, 5 Nov. 2017, https://www.forbes.com/sites/andrewjosuweit/2017/11/05/6-

ways-congress-can-help-ease-the-student-loan-crisis/#d3.

Minsky, Adam S. “Managing Student Loans in a Changing Landscape.” Journal of Financial

Planning, vol. 31, no. 2, Feb. 2018, pp. 22–26. EBSCOhost,

search.ebscohost.com/login.aspx?direct=true&db=bth&AN=127849568&site=eds-live.
 Humphrey 10

Nadworny, Elissa. “Families, Not Just Students, Feel The Weight Of The Student Loan Crisis.”

NPR, NPR, 4 Sept. 2019, https://www.npr.org/2019/09/04/755221033/families-not-just-

students-feel-the-weight-of-the-student-loan-crisis

ONeal, Anthony, and Dave Ramsey. Debt Free Degree: the Step-by-Step Guide to Getting Your

Kid through College without Student Loans. Ramsey Press, 2019

Popescu, Gheorghe H. “Does Student Debt Constitute a Bubble That May Bring about an

Educational Crisis?” Educational Philosophy & Theory, vol. 50, no. 2, Feb. 2018, pp.

115–118. EBSCOhost, doi:10.1080/00131857.2017.1300027.