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Student Loans Essay

1753 words - 8 pages

College educations are getting more expensive every year. While pursuing further education is a great way to mature intellectually and open paths into a variety of career choices, it is becoming somewhat of a trouble for some families to pay for a college degree. A way to help these less fortunate families has been around for many years now, known as student loans. This program was implemented to create a way for students to get money to pay for college now, and be able to pay the money back with interest after obtaining a career in the field of their choice. Although this was intended to make things easier on students, it has turned out to have an overall negative effect. Countless ...view middle of the document...

08 trillion, an increase of over 300%” (Frizell). The other aspect of student loans is that many students use them to pay for expenses not even related to education. The rise of education has led to more students to borrowing excessively for personal expenses, and a report by The Education Department’s inspector general also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time (Mitchell). Another instance for misuse of loan money is that recent “Research suggests a fair chunk of that is going to non-education expenses. In 2011-12, about a quarter of student borrowers took out loans that exceeded their tuition, after grants, by $2,500” (Mitchell). This ability of students to potentially misuse student loans to not even pay for their education is one flaw of many, and clearly needs to be either reformed or replaced by a more adequate method. Further studies show that “The share of student borrowers taking out the maximum amount of loans—$12,500 a year for undergraduates—has risen since the recession. In the 2011-12 academic year, federal Education Department data show, 68% of all undergraduate borrowers hit the annual loan ceiling, up from 60% in 2008” (Mitchell). Student loans not only negatively impact the students who take them out, but also hinder economic growth. “Bigger debts mean college graduates are less likely to take out mortgages than they used to be, dampening economic growth” and thus student loans have created a broader range of potential harm (Frizell). This economic drain is illustrated by looking at 2009, in which “young adults with student loan debt were more likely to own homes and were more likely to have car loans outstanding than were people of the same age without student loans” (Norris). Now compare this to now, in which young people with students loans are less likely to buy a house, take out car loans, have worse credit scores, and are more likely to be living with their parents (Norris). The amount of people who graduate with students loans are increasing every year, and thus remove the potential buyers from the economy, restricting economic flow in many parts of the country. Consumer purchasing is one of the most important factors, which drive the U.S. Economy, and with the number of students graduating with debt and defaulting loans, this could lead to catastrophic effects in a mere several years (Frizell).
From the presented examples and statistics, it is undeniably clear that student loans have many problems and should be removed from the education system or need to be entirely reformed. The number of student loans handed out each year that end up going towards expenses not even related to education is absurd. This also shows that student loan companies and universities are not completely interested in helping out the student, but they view the students as just another potential customer, and know that they will profit...

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