How to Get Rid of Student Loan Debt | US News

Part 1: Introduction 

Student loans provide an opportunity for learners to obtain the necessary financial resources to complete a given course. The options available for students consider the need for increased flexibility to ensure that individuals can access the credit required on manageable terms. The evaluations conducted in 2020 indicated that the debts accruing from advancing some loans to students amounted to approximately $1.56 trillion as of 2020 ( Friedman, 2020). Additionally, the United States has an estimated 43.2 million individuals who request funds from various lenient lending institutions, with average arrears amounting to $39,351 per person. 

Thesis statement 

Student debt loans hinder most college graduates' progress in life as they have difficulties accumulating assets, building their net worth and increasing their earning power. 

Part 2: The history of student loans and past attempts at a solution 

The National Defense Education Act implemented in 1958 enabled Americans to obtain scholarships for their college education. The regulation also availed loans to students to pursue various courses. The initiative stemmed from the need to ensure technological advancement in America. In 1965, Lyndon B. Johnson implemented the Higher Education Act to deal with poverty efficiently. The law advocated for the evaluation of an individual's income as a basis of advancing grants regardless of their ethnicity or race. The 1980s culminated in a tax revolt that involved the implementation of expenditure limitations by various states. The lack of subsidies for college education made the pursuit of higher education expensive. Furthermore, the resources available for college education became further affected in 2007as a result of the Great Recession. The economic instability culminated in an increasing level of debt as students faced difficulties clearing their loans. 

In an attempt to adequately deal with the student debt problem, the American government sought contractors' services to collect the owed amounts. The companies hired mismanaged the payments received from borrowers. Despite the lower repayment rates levied for families, the government still profits from debt recovery processes. Thus, Americans have become increasingly concerned about its to fulfill its mandate to families and taxpayers. 

Part 3: Discuss the extent of the problem. Who is affected by it? How bad is it? 

Undergraduates can obtain loans at a margin of 2.75% in the United States from 2020 to 2021. The rate increases for unsubsidized financial resources to 4.3%- 5.3%. The amounts levied on students continue increasing, especially with defaulted payments. Additionally, interest accrues immediately learners have access to the funds contributing to American education's extensive costs. 

Student debts primarily affect undergraduates. However, such individuals' inability to make decisions efficiently as they consider their arrears also impacts their families and societies at large. More specifically, communities have to deal with various abandoned career paths, an overall reduction in first-home purchases, and individuals' inability to engage in entrepreneurship ventures ( Lammers, Carroll & Lughnane, 2013). As a result, the economy suffers owing to reduced investments and employment opportunities, particularly in the public sector. 

Part 4: The consequences anticipated without an appropriate solution to student loans 

Student loans will continue to have an adverse effect on individuals, particularly after graduation. Currently, indebted parties face numerous challenges in accumulating assets in comparison to those who completed similar courses without depending on various lending institutions. Additionally, the arrears make it difficult for loan beneficiaries to build their net worth ( Elliott & Lewis, 2015). Moreover, their home equity becomes extensively reduced and they also have an adversely affected earning power. The inability to resolve an individual's student debt problem would further aggravate such issues. 

After graduation, most individuals make their daily financial decisions based on their student loans. As a result, some people have become reluctant to effectively invest their resources. American Student Assistance survey indicated that most college graduates had difficulties making progress in life owing to the credit obtained to aid their educational pursuits. The continued absence of a relevant solution would make it difficult for people to make appropriate and beneficial financial decisions. 

An individual's arrears after completing their higher education often determines their job selection criteria. According to Rothstein & Rouse (2011), college graduates opt for high-salary jobs. As a result, they refrain from applying for employment opportunities that cater to public interest with low payments. The trend would have an upward trajectory into the further without an appropriate solution for the affected parties. 

Part 5: The argument and objections 

The American Student Assistance survey indicates that 52% of the respondents highlighted their inability to buy cars while 62% refrained from accumulating some funds for their retirement ( Lammers, Carroll & Lughnane, 2013). Out of the total number of respondents, 35% faced numerous unprecedented difficulties in purchasing their daily necessities. Despite the negative outcomes associated with accruing arrears from student loans, college graduates have an allowance of taking up to 20 years to settle the amounts. In comparison to other institutions' financial resources, learners can make use of the lenient terms applied by lenders such as the federal government. Additionally, student loans improve an individual's welfare, particularly after obtaining a suitable employment job. The statistical data currently available indicates that college graduates have annual earnings amounting to $96,772 annually in comparison to a sum of $50,000 for individuals with a lower level of education on average. 

Part 6: Conclusion 

Student loan debts affect college graduates negatively by decreasing their ability to make some progress in their lives. Most individuals make financial decisions based on the debt amassed as they pursued higher education. Furthermore, the credit advance to most students influences the job application procedures making them opt for better paying jobs as opposed to vacancies that aimed at fulfilling public interests. 

References 

Brown v. Board of Education , 347 U.S. 483, 74 S. Ct. 686, 98 L. Ed. 873 (1954). 

Elliott, W., & Lewis, M. (2015). Student debt affects on financial well‐being: Research and policy implications. Journal of Economic Surveys , 29 (4), 614-636. 

Friedman, Z. (2020, February 3). Student Loan Debt Statistics In 2020: A Record $1.6 Trillion. Forbes. https://www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics/?sh=3fcd276a281f 

Lammers, J. R., Carroll, A., & Lughnane, S. (2013). Life delayed: The impact of student debt on the daily lives of young Americans. American Student Assistance Organization . 

Rothstein, J., & Rouse, C. E. (2011). Constrained after college: Student loans and early-career occupational choices. Journal of Public Economics , 95 (1-2), 149-163.