Student Loan Debt

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Some reporters and commentators have dubbed student debt “the next subprime.” This comparison certainly grabs a reader’s attention, and it may cause readers to ask: Does student loan debt in the United States have the potential to cause a similar amount of financial damage as the mortgage crisis?” What this means is that student loans are increasing so rapidly that they have managed to exceed credit card debt and is increasing at an uncontrollable rate. I also believe it’s interesting when they state, “A higher rate indicates that more loans are becoming seriously delinquent and is an early indicator of potentially greater credit losses. The rate of new serious delinquencies for student loans has been relatively constant since 2006 at around …show more content…

Balaji Rajan, president and CEO of Ceannate Corp., leading business process outsourcing firm focused entirely on the students and institutions in the post-secondary education sector (Rajan). assets that a possible solution lies on the hands of Congress. If Congress’s efforts succeed on pushing towards reauthorizing the Higher Education Act and strengthen student loan policies, we may have a stop to the debt issue.. First and foremost, Congress should consider offering college students two federal loans at two different interest rates. The loan for education-related expenses, such as tuition and textbooks , would carry the lower rate. The loan for living expenses would carry the higher rate. Neither loan could be used for luxury spending (Rajan). That would be extremely helpful for many students that are tempted to spend their money on personal stuff other than using it toward their education. According to Rajan the reason behind this proposal may be clear but compelling. Students must know how to distinguish between the extras and the essentials before they get money from a lender. The Higher Education system may be able to promote responsible financial behavior and prevent student debt from spiraling out of control. Rajan goes on and states, “Simply lowering interest rates across the boards , as some have suggested, would not discourage students from spending wastefully and might …show more content…

According to this research by Lindsey students who enroll “with no prior college credits should be able to complete the degree program in three years at a total cost of $13,000 to $15,000”. That is less than half the price of a traditional degree at a Texas public four-year university. Students who enroll having already met their general education requirements can complete the degree in two years. Those enrolling with “90 credit hours and no credential” can finish their degree “in one year for $4,500 to $6,000.” (Lindsay). The significance in this finding is fascinating. If many colleges across the nation use this idea it would save every student thousands of dollars. And also provide an opportunity for those to attend college as a first generation as

In this essay, the author

  • Analyzes how student loan debt is increasing rapidly, exceeding credit card debt, and is an early indicator of potentially greater credit losses. the median earnings for full-time year-round working young adults ages 25-34 with a bachelor's degree was $46,900.
  • Explains that young adults with a bachelor's degree earned more than twice as much as those without high school diploma or its equivalent.
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