Student Loans And Its Effect On The Nation 's Economy Essay

Student Loans And Its Effect On The Nation 's Economy Essay

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As the years pass by, more and more college universities are gradually becoming more expensive in tuition, and other school-related expenses. Across the nation there are millions of college students who are in a way, “forced”, to take out loans through banks, their personal universities, or other financial aid services, because of their inability to fully pay for these colleges’ overwhelming expense fees. These loans being taken by students and parents across the nation may or may not always be paid back immediately-- some adults give testament admitting that they are still paying off their student loans from ten or twenty years ago, up to this day. Our goal, is to analyze and assess the specific numbers of student loans taken for given years, its direct effect on the nation’s economy, and come up with potential solutions for how to fix any negative problems that may be created.

[Description of the economic issue (key facts, diagrams)]
According to Barbara O’Neill, a financial resource manager at Rutgers University, from 2004-2014 Student Debt has quadrupled and the student default has doubled. The amount of average student debt has increased from about $15,000, for a student with a bachelor 's degree, to about $27,000. This negatively affects the economy because after graduating these students aren’t able to buy things that makes the economy move. For example, people are buying less houses, cars, and are less likely to start up a small business as a result of the amount of debt they have accumulated. To add, because of the amount of debt each person has, they are less likely to borrow money in the future or take bigger risks financially.
Things like investing in themselves or their goals, in companies/stocks, or in doing small ...


... middle of paper ...


... monthly stipend from Denmark’s government. While things like obtaining a higher education in Denmark are nearly free, the mandatory taxation
[our solution & why it could potentially work]
****The Federal Reserve Bank of New York released a study in 2013 stating that 43% of 25 year olds had student debt in 2012. Which was a huge increase from the 2004 number which was 27%.
To get a handle on the student debt problem, the federal government needs to provide relief programs for private loan borrowers too. The federal Consumer Financial Protection Bureau announced in 2013, that it was soliciting ideas from policy makers and others for a plan that would give private loan borrowers some relief. Such a plan, which would most likely involve a public-private partnership that freed up capital for refinancing, would have to be part of any solution to the student debt crisis.

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