Does the amount of student loan debt have an effect on the economy? If so would forgiving student loan debt help lower the national debt or would it just increase it? According to Mary Claire Fischer, a writer for Kiplinger’s Personal Finance magazine, “two-thirds of students who receive bachelor’s degrees leave college with an average debt of twenty-six thousand dollars” (Fischer). This means that the average student debt has doubled since 2007 (Ross 24). The total student loan debt is $1.2 trillion with $1 trillion being from federal student loans (Denhart). This debt accounts for six percent of our nation’s $16.7 trillion debt (Denhart). Since student loan debt is such a big part of the national debt, if the student defaults on their loan then the United States tax payer has to carry the burden of the loan (Denhart). Students who are graduating with debt do have a couple of different options that they can choose from. There is a six month grace period after graduation to allow the student time to find a job and programs to try to help eliminate debt. “The Consumer Financial Protection Bureau estimates that one-fourth of the American workforce may be eligible for repayment or loan forgiveness programs” (Atteberry n.p.). The problem with these programs however, is that they are hard to get into and stick with.
Some of these programs that are options for students may require that student to move to another city or even another country. This option would work well for someone who is able to move, but what about someone who cannot leave where they currently live. These graduates may not want to leave because of family for example. Another problem with these programs is that the student with loan debt must fully complete the program. The graduate cannot quit early and earn money towards paying off their debt. Even if the graduate is willing to relocate or to fully commit to the program, there is only a fifteen to thirty percent chance that they will get accepted into the program they need to help pay off their student debt (Fischer).
A graduate who wants to be a public school teacher has the option of applying to the Teacher Forgiveness Program. In this program up to “seventeen thousand five hundred dollars of federal Stafford loans or the entirety of their Perkins loans can be forgiven in exchange for five consecutive full-time years as a teacher at certain low-income elementary or secondary schools” (Atteberry). This sounds like an excellent program, but what if the graduate student cannot find a job at one of these schools? The economy is not very good in today’s society and many schools are facing budget cuts. These budget cuts often effect the teachers by their salary. Also, if the teacher in the Teacher Forgiveness Program got laid off because of budget cuts before their five years where up then none of their loan would be paid.
Another option that students with debt may take would be joining the military. The military has...