States, Banks Must Address Student Debt Crisis

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States, Banks Must Address Student Debt Crisis

InvestmentZen: www.investmentzen.com

InvestmentZen: www.investmentzen.com

InvestmentZen: www.investmentzen.com

Katelyn Taylor, Senior

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For me, someone who wants to go to college for physical therapy, I know that I have a long road ahead of me to continue my education. One thing that I personally fear is drowning in student loan debt and not being able to afford my degree.

I know I am not the only student who feels this way.

Student loan debt has now reached an all-time high of more than $1.5 trillion, a fact that affects the emotional status of student borrowers, their families and society. To solve this crisis, colleges need to be more significantly funded by the state, and banks need to change their payment plans.

Many students regret how much money they have borrowed in student loans, according to a 2003 study. These levels of financial stress are tremendous and can ruin the student’s college career if they continue to borrow more loans to cover college expenses. It could lead to students dropping out because they don’t believe they can afford any more debt.

Not only does college debt bring stress, but it can affect your whole life, including purchasing a house, finding a significant other, and even having kids. So, college debt affects your emotional status, brings stress and even effects your life overall with becoming a successful adult.

However, if public colleges in America were better funded by the state, then students would not have to pay as much for tuition as they do now, meaning a decrease in debt, default and stress. If states increased their funding to colleges than student loan debt could decrease significantly. Although state funding is key to decreasing debt there are more solutions that could solve this gigantic issue.

Another solution to solve the high amounts of debt, default and stress of paying back loans is banks needing to change their payment plans. If America was like other countries and didn’t make their borrowers pay back until students earn a certain amount, a decrease in default would be likely.

For example, in Australia, “borrowers do not start paying until their income exceeds the equivalent of $44,000,” according to a story in The New York Times. This method gives borrowers a chance to get their adult life started and not have to worry about student loan debt once they get out of college the way students in the United States do. This would relieve many college students because they would have time to find a good and reliable job and keep their emotional state steady and stress free.

Colleges in America need to be funded more significantly and banks need to change their payment plans because at this rate, if college prices keep increasing, nobody is going to attend college because they won’t be able to afford it.

 

 

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