If the sky is the limit, then student loans are the hurricanes of our generation: a destructive force preventing the nation’s youth from reaching their true potential. Over the recent decades, the student debt crisis has ballooned into an immense issue that can no longer be pushed aside; at $1.4 trillion, student loans have become the second largest source of household debt (Federal Reserve). Millions of other students across the country should not be restrained by their socioeconomic status, and the cost of education should not stand in the way of their ambitions.
Effects of Overwhelming Student Loans
The overwhelming burden of debt cripples not only the students who carry them, but also the nation’s economy. According to Klaauw of New York Fed’s research and statistics group, those with student loans “have worse credit scores” and are “more likely to be living with their parents” (Norris). In fact, the Consumer Financial Protection Bureau revealed an increase of 4.7 million Americans ages 25 to 34 living with parents from 2007 to 2011 (Touryalai). Additionally, desire to avoid being stuck in debt could result in students opting out of higher education as a third of millenials have reported regretting attending college: a step backwards from efforts to increase education accessibility (Touryalai).
Potential Solutions for Student Loans
To address such a complex problem, there must be a multi-step solution that aids students in paying off debts. The first step is for governments to open up more pathways to scholarships for high school students. The national merit scholarship is a great example of a program that help students receive funding for their education, but more merit based scholarship should be made available on a local basis. This is not merely limited to academic achievement, but also in areas such as art, athletics, and writing. Furthermore, grants should also be given to graduating students for their achievements during college to help them pay existing loans.
Additionally, resources on student loans should be offered to high school and college students. Students should be educated on the financial factors of their education along with the academic aspect. A study done by Cengage, an educational services company, used a combination of surveys and public data from the Student Opportunity Index to find that recent grads estimated their debts would be paid off in six years. However, the Department of Education found the number closer to twenty years (Cengage). Providing critical information would help reduce misconceptions among students. For example, holding free consultation workshops on paying off loans is a great first step towards debt awareness.
Current Resources for Students Taking Out Loans
Unfortunately major policy changes might take years or decades to implement. No matter what your position in life is, it’s important to take action to pursue your goals. If you are a student worrying about paying for college, here are some steps you can take to ease the weight of student loans:
- Apply for Grants: many institutions, including the federal government gives out grants for students on an academic or financial basis. For example, Federal Pell Grants are awarded by the Department of Education for undergraduate students who demonstrate financial need.
- Compete for Scholarships: a vast amount of organizations host competitions, offering scholarships in the thousands of dollars to the winner(s). From writing to art to singing, these contests are a valuable way to show off your talents, win money for college, and impress admissions officers. Websites such as Scholarships.com are a good way to find scholarship opportunities.
- Ask Universities: if you are interested in an university, but aren’t sure if you can afford it, don’t hesitate to call the admissions office or financial aid office to inquire about their policies. Additionally, many universities have information on their websites or host webinars on financial aid, so make sure to do a bit of research!
Cengage, 2019 Cengage Student Opportunity Index, 2019 https://embed.widencdn.net/pdf/plus/cengage/qwntsqxbxh/todays-learner-student-opportunity-index-infographic-1015733-final.pdf
Federal Reserve Bank of New York, Quarterly Report on Household Debt and Credit. URL: https://www.newyorkfed.org/microeconomics/hhdc.html accessed on January 8, 2018.
Norris, Floyd. “The Hefty Yoke of Student Loan Debt.” The New York Times, The New York Times, 20 Feb. 2014, http://www.nytimes.com/2014/02/20/business/economy/the-hefty-yoke-of-student-loan-debt.html?ref=education&_r=3.
Touryalai, Halah. “Student Loan Problems: One Third Of Millennials Regret Going To College.” Forbes, Forbes Magazine, 23 May 2013, http://www.forbes.com/sites/halahtouryalai/2013/05/22/student-loan-problems-one-third-of-millennials-regret-going-to-college/#e95259977978.
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