Student Debt Crisis - 1380 Words

1.0 Introduction A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy. There are two types of student loan that can be applied which are federal student loan and private student loan. Basically, students are more prefer to make a loan in federal student loan because the fixed interest rate wouldn’t affect the payment that they have to pay even the interest rate rise. In addition, government also provide free insurance†¦show more content†¦4.0 Impacts 5.5 Burden their family for decades Currently, federal student loans are automatically cancelled when the borrower killed or disabled but private student loans become the responsibilities of the students’ families. So that, the student that borrow private loan which have high interest rate just give a burden for their family to settle the debt. Since the family have responsible to pay the debt together with the interest rate, they will have no saving in future. 5.6 Could slow economic recovery in housing market The extensive amount of national debt held by college graduates in federal student loans debt is affecting their ability to qualify for a home loan and a delay in housing market growth. Students coming out of college today have more federal student loan debt than ever and they’re coming into an economy that is under performing. The $1 trillion in student loan debt is starting to slow the economy just as the housing bubble created a mortgage debt problem. For couples looking to buy a house, it is more difficult to qualify for a home mortgage when even one of the buyers has student debt, and even harder if both buyers have student debt. 5.7 Decrease the liquidity of bank Banks may also face difficulty in providing liquidity during a debt crisis ifShow MoreRelatedStudent Debt Crisis And The Housing Crisis920 Words   |  4 Pagesthe United States: student debt is at an all-time high. For the first time in mid- 2013, student debt rose to 830 billion, surpassing the credit-card debt (Clemmitt). Many economists and scholars compare the student debt crisis to the housing bubble, which resulted in a nationwide recession 2008. In a senate hearing regarding the current student debt crisis, Illinois Attorney General Lisa Madigan said, â€Å"The warning signs are there, just like they were before the housing crisis, and congress needsRead MoreThe Nationwide Student Debt Crisis967 Words   |  4 PagesFact or Fiction: The Nationwide Student Debt Crisis In the United States, it is generally accepted that college (or any form of higher education for that matter) is a wise investment that each and every individual should strive for. Each and every year thousands of parents open college funds and future investment plans to ensure that once their child is of age he or she can participate in quality educational programs. While college attendance rates are at a positive all-time high, right behind itRead MoreThe Student Loan Debt Crisis1247 Words   |  5 Pages The Student Loan Debt Crisis Student loan debt has overtime become an unpleasant part of life for millions of Americans and especially borrowers. It is possible to identify the types of people who went through college and borrowed financial loans from those that went through college and did not go to college or those that went but did not borrow. The debt crisis directly affects the families of the borrowers, those with high debt burdens and advanced degrees. Despite the increased length in loanRead MoreThe Problem Of Student Debt Crisis1592 Words   |  7 Pageshigher education. Today college has become almost a necessity to have a satisfactory life, and with these rising prices some individuals believe student loans are the only option. There are many reasons as to why the prices have risen, but the one undeniable fact is that this has created a problem within our country. Which, is known as the student debt crisis, and it has been on the rise the past couple years. This problem is affecting people all around the United States, and is causing multitude ofRead MoreStudent Finance : Student Debt Crisis1663 Words   |  7 PagesExecutive Summary: A decade ago, student loans barely existed. Today, however, American students borrow up to couple million dollars a year to attend college. An entire generation is burdened with debt, and affected by the modern phenomena known as the â€Å"student debt crisis.† In recent years, student loan borrowing rates have risen notably, leading to concern about the public financial risks associated with the financial challenges faced by many students. Of late, the United States government hasRead MoreSolving The Student Debt Crisis Essay1609 Words   |  7 PagesThe student debt crisis has reached an all time high with debt reaching a total of 1.3 trillion dollars across the United States.With tuition cost increasing,lack of scholarships and an increase of government loans,student debt will continue to increase.The enormous amount of debt put upon each student creates the inability of those students to help the economy grow.Our economy as we know it is in shambles and decreasing the stu dent debt significantly will help the economy grow.Instead of debt owersRead MoreThe Student Loan Debt Crisis1873 Words   |  8 Pagesguaranteed employment, financial stability, and an indicator of success, has been declared in jeopardy. Topping the credit card debt and many household debts, the student loan debt has been pronounced the next potential financial disaster in the U.S. With 2014’s numbers currently exceeding $1.2 trillion, the debt figures have reached about twice of 2007’s remaining debt (Akers, 2014). Gone are the days when a parent could send a child to the state university to study their interests and finish offRead MoreStudent Loan Debt Crisis Essay1214 Words   |  5 PagesStudent Loan Debt Crisis What do you think of when you hear the words college graduate? Well, in most scenarios, these words would be exciting to someone that just graduated college who have put in years of hard work and dedication to better educate and promote themselves for their future careers. Sadly enough, this is too far common not the case. In today’s society, students are graduating college with piles of debt at an alarming rate. With a troubled economy that is recovering from a recessionRead MoreStudent Debt Crisis And Its Effects On The Economy1586 Words   |  7 Pagesstudent debt crisis has reached an all time high with debt reaching a total of 1.3 trillion dollars across the United States.With tuition cost increasing,lack of scholarships and unpaid back loans,student debt will continue to increase even higher.The enormous amount of debt put upon each student creates the inability of those students to help the economy grow.Our economy as we know it is a loop and decreasing the student de bt significantly will help the economy grow.Instead of putting that moneyRead MoreStudent Loan Debt Is A Financial Crisis1700 Words   |  7 Pagesincreases the pile of debt students may graduate with gets bigger and bigger. This problem is America’s next sizeable financial crisis, but this crisis however is avoidable. Student loan debt is a financial bubble waiting to blow up just as the housing market collapse did in 2007, which the country is only just now starting to see signs of recovery from. The cost of a four-year degree has seen increases that surpass inflation and health care costs. Likewise, the amount of student loan debt is now greater