Category: Student Loan Debt

Student loan refers to money payable on money borrowed out to cover school costs. Student loans are now the only way the majority of students can help pay for college tuition due

to tuition fees increasing each year. The majority of federal student loan debt was managed in the United States by a publicly listed firm called Sallie Mae until its debt loan operations and portfolio were eventually handed over to another organization called Navient in the year 2014. College loans are often generated once a student takes out loans to finance a fraction of their tuition, which is not covered by their funds, grants, parental or caregiver loans, or scholarships. Although students can have savings they can put toward the expense of higher learning, the mounting cost of learning at most schooling institutions is making it more challenging to meet such expenditures without some financial aid. With the rising cost of tuition, materials, and other additional fees, student loan debt can quickly mount, particularly for graduate degrees. Even though it is expected that students will seek occupations and professions that would allow them to pay off their debt over time, there seem to be no assurances that they will do so post-graduation. The benefit of student loans is that it would be feasible to make much more income or follow a much more personally gratifying job by taking loans to earn a degree, rendering the loan economically justified. One of the disadvantages of college loans is that certain undergraduate students accumulate debt without ever graduating.

In contrast, others accumulate more outstanding loans than they will ever safely repay, considering their career choice. Student loan debt is also unique in that most people acquire it at an early age before truly understanding the consequences of their choices (Houle and Cody 92). Additionally, unlike other types of loans, student loan debt is often not cancellable in bankruptcy unless there is an exigent circumstance. Working while still in college, getting scholarships, and attending a public, in-state college can help students avoid getting into debt to pay for their degree. College loans that are in the form of direct loans from the federal government can be helpful for graduates who end up working in public services and professions. They can work for a specified amount of time while completing a specified number of repayments on their loans and qualify or become eligible for part of or the remaining amount of their loan debts being canceled. Additionally, students who receive college loans from the federal government and become eligible for specific repayment programs, like those based on their income, are capable of qualifying for their outstanding debt amounts to be canceled after 20 to 25 years of repayment based on the program. Forgiveness, cancelation, or discharge of a loan means that some or all of the loans are no longer required to be repaid. Discharge, cancelation, and forgiveness have meanings that are almost similar. If an individual is no longer obliged to pay their outstanding loan due to their employment, it is generally referred to as cancelation or forgiveness. However, if due to other reasons, such as permanent disability or the learning institution where the loan was received is closed, loan repayments are no longer needed; this is referred to as discharge. Therefore, the issue of college debt is of a great magnitude and requires to be examined at a deeper level to understand how it can be managed.

When college debt undermines the health and well-being of youthful borrowers, it is too much. According to studies, the stress of debt negatively impacts mental health, physical well-being, and personal fulfillment (Pisaniello et al. 11). It also prompts borrowers to put off getting married, renting or purchasing a property, and beginning new enterprises. Student loan debt is also excessive when it prevents people from achieving the American dream, which is the belief that prosperity is attainable in the United States regardless of one’s upbringing (Shireman 189). Students who are the first in their families to go to college and those that are from low-income families have a significantly harder time repaying their college debt and are much more likely to default than other students. African Americans, who owe 60% more than white students, struggle considerably more to pay their debts, owing to ongoing racial inequality and economic disparities. The government’s initial intention in financing students was to assist low-income individuals in obtaining college degrees. However, it is today’s borrowers who are much more disadvantaged by college debt. College debt worsens income disparity, especially among white and black families.

Student loans are commonly regarded as a means of achieving social mobility. However, this only functions if the borrowers’ financial situation improves enough over time to allow them to pay back the debt. This may not be the case for several debtors. Even among graduate students, African Americans receive significantly less income from their degrees than white students and are saddled with far higher loan payments. African American graduates also have more challenges in achieving financial freedom from their families, in part due to labor market prejudice, which makes it harder to get the higher-paying and better-benefit positions that tertiary education is intended to give. As a result, Black students still owe approximately 90% of what they received two decades after enrollment instead of less than 10% for white grads.

As of 2020, the majority of students in America are forced to get loans to be able to go through college. The average debt in student loans in 2020 topped approximately $37,000. Furthermore, the collective debt is close to $1.6 trillion, as stated by the Federal Reserve Bank of New York (Swilley). Getting a degree nowadays necessitates a far more considerable financial investment than it did some decades ago. The average cost for a student to obtain a four-year degree from a public university has increased substantially in the last 30 years. In contrast, it has more than doubled at private four-year institutions, as per the College Board. Investments and savings are still not enough for most Americans to cover their expenses. As a result, more students and parents turn to loans to fund their postsecondary studies, and the average student loan debt continues to rise. As per Experian spokesperson Amanda Garofalo, the cumulative number of current college loan debt hit a record high of $1.57 trillion in 2020. Furthermore, the website SavingforCollege.com states that overall student loans may exceed $2 trillion by 2024 and $3 trillion by 2038 at the present rate of increase. The rising cost of schooling is undoubtedly a significant contributor to the increasing level of debt. An in-state student pursuing a four-year degree in a public university costs nearly $25,500 for each academic year. On the other hand, private universities spend a yearly average of up to $53,000, where tuition and fees were accounting for $35,801. There is a substantial detrimental impact on the economy when student graduates seeking a job are in debt of close to $30,000. Despite having a degree, fresh graduates are often compelled to accept employments that pay low income and require low skills so that they can start paying off their college debts immediately. Consequently, such graduates end up missing out on the distinct advantages and benefits received by degree-holding graduates who have no debts. Moreover, graduates with pending college loans are 36 percent less inclined to buy a home, according to ProgressNow, and additional data shows that ‘those with college loan debt are also less likely to be taking out vehicle loans (Scott III and Bloom).

College attendance is increasing, and far more students from low- and middle-income households are enrolling. An increase in student loan debt results from a couple of things. The fall in the earnings advantage for grads compared to non-graduates is one explanation. It has not declined sharply, but it has dropped to record lows for individuals born after 1980. The rate of interest charged on the loans given out also contributes to the increase. Another consideration is the new regulations put in place by the federal government. New restrictions govern who can borrow and how much they can owe. The expense of attending college and university has been rising. Tuition has increased, notably at four-year public universities, but it isn’t as much of an impact as well-publicized rises in advertised price tags; the tuition net of scholarships has not grown at all after accounting for grants and scholarships at private four-year universities.

From 1990 to 2012, there was a 62% rise in undergraduate students who borrowed college loans to pursue a degree. The increase in tuition fees caused the increase. Also, within the same time span, there was a 39% surge in the median loan amount. Students frequently borrow loans to cater for living expenses even though the average undergraduate student at a community college receives sufficient financial support to pay for their tuition and other additional fees. Borrowing has become accessible and affordable due to the federal government’s altering existing criteria. For instance, parents were allowed to borrow in 1980 after Congress passed a law. Moreover, the income restriction on individuals who could borrow loans was removed by Congress in 1992. It also increased the undergraduate borrowing limit for students and removed the limit of borrowing for parents. In 2006, the limit on how much college students could borrow was abolished. Consequently, many parents took out and are still taking out additional loans. Parents’ borrowing has tripled over the past two decades owing to these laws. Thus, an increasing number of parents have debts.

In 2014, over $100,000 were owned by 8.8% of the parent borrowers starting payment on their final loan, compared with 0.4% in 2000. Obtaining college loans for graduate studies is at an all-time high. For example, average yearly borrowing by undergraduate students surged by roughly 75% (to $7,280) from 1994 to 2014, whereas average yearly borrowing by graduate students surged by 110 percent (to $23,875). President Joe Biden recently called for $10,000 for loan forgiveness from students, whereas others, like Senator Elizabeth Warren, called for loan forgiveness of up to $50,000. Some have even called for total debt relief, which throughout the last 20 years could very well symbolize higher expenditure than aggregate unemployment benefits expenditure. Sixty-three percent of participants have consistently supported a $20,000 reduction in student loans in a Center for Responsible Lending survey. As policymakers tackle this issue, the links between loan forgiveness and family behavior are essential to watch.

In conclusion, Student loans are increased by rising educational fees and the need to thrive in the labor market. Over half of all students across the United States have to borrow money to pay for college (Shireman 187). Those individuals who do not finish their education are more prone to default on their loans. Provided one graduate and can repay their student debt, higher education is often worth the financial commitment. College is often considered the most significant driver for upward mobility, but financial risks are involved. Several students do not have access to university fees without taking student loans. Although graduating from a university may result in higher income, it does not always imply student loan worthiness. Newly college graduates struggle to find work and some employers hire someone else that has work experience rather than a degree. This leads to the graduate accepting jobs that are out of their field of education and are overqualified for based on their education (Leonhardt 103).

Borrowing money is an important decision that should take into account in many aspects. For decades, high school, employment opportunities, the cost of your school, and the total amount of student loans can impact the finances of one’s family. After high school, the decision to continue one’s education is a very personal one. Nonetheless, once a person has decided, it is critical to budget out the funds ahead of time so that they are not overwhelmed when it comes to paying for classes. In addition, once a person begins college courses, it is critical to complete them with passing grades and obtain a degree. The worst-case scenario is accumulating student debt and then failing to acquire a college degree and the benefits it holds in your future in your career.

Works Cited

1. Houle, Jason N., and Cody Warner. ‘Into the red and back to the nest? Student debt, college completion, and returning to the parental home among young adults.’ Sociology of Education 90.1 2017, 89-108.
2. Leonhardt, David. “Is College Worth It? Clearly, New Data Say.” The Blair Reader: Exploring Issues and Ideas. Ed. Laurie G. Kirszner and Stephen R. Mandell. 9th ed. Pearson, 2017, 102-105.
3. Pisaniello, Monique Simone, et al. ‘Effect of medical student debt on mental health, academic performance and specialty choice: a systematic review.’ BMJ open 9.7 2019, e029980.
4. Scott III, Robert H., and Steven Bloom. ‘Student loan debt and first-time home buying in the USA.’ International Journal of Housing Markets and Analysis, 2021.
5. Shireman, Robert. ‘Learn now, pay later: A history of income-contingent student loans in the United States.’ The ANNALS of the American Academy of Political and Social Science 671.1 2017, 184-201.
6. Swilley, N. ‘The college debt crisis is even worse than you think.’ Boston Globe, 2016.

The growing problem of the Student Loan Crisis in the United States is driving incoming college freshman away from pursuing further education. Student loan debts cause young adults to question their future, wondering if a college education is worth carrying a huge student debt burden. Coming from a personal experience, I know when applying for colleges I was, and still am, afraid of how my student debt will affect my life after I graduate. I believe all student loans in America should be abolished and every American should be provided with a free college education.

[image: ] First, there are millions of Americans who have student debt yet to be paid off. In a published Time Magazine article, written by Senators Mark Warner and John Thune (2019), they state that there are approximately 44 million Americans who are in student loan debt, which totals over $1.5 trillion. This statistic puts emphasis on how costly a college education is. Current and future college students should not have to worry about how they will be able to cover the cost of their education, they should worry about their grades and how they will succeed in their selected career pathway. In Figure 1, the image presents to us the average student loan debt compared to investing in other things like a car or a home. According to the U.S. Department of Education, “College graduates with a bachelor’s degree typically earn 66 percent more than those with only a high school diploma; and are also far less likely to face unemployment.” This vitalizes how important a college degree can be. But, with how high the costs are to get a degree can cause students, particularly students who come from low-income families, to drop out because they just cannot afford it. Right now, student loans have the highest rate of delinquency (NitroCollege). Young adults should not have to face the consequences of paying off college debt after they graduate, they should focus on finding a stable job. Yes, scholarships and financial aid can contribute to lowering the costs of a college education, but it does not amount to the thousands and thousands of dollars that remain to be paid off. Figure 1:

This image shows the comparisons between the average student loan debt once graduated to the price of certain investments.

Last, there are a few select countries around the globe who provide free tuition for college students. One of these countries is Germany. Many American students who study abroad go to Germany for the reason of free tuition (University of the People). Right now, there are about 10,000 Americans enrolled in German universities, most of them studying for free (NBCNews). Since Germany is successful with tuition-free universities, then why can’t we incorporate them to the United States? Yes, we obviously can’t start having tuition-free colleges overnight, but we can start to decrease the price of tuition until we meet that goal.

In conclusion, the Student Loan Debt Crisis in the United States is a major problem that needs to be solved. Many college graduates struggle with the burden of paying off their student loan. Germany is one of the few countries in the world who has free colleges. America should abolish all student loans and provide a free college education to every American.

References

1. College Affordability and Completion: Ensuring a Pathway to Opportunity. (n.d.). U.S. Department of Education. Retrieved from https://www.ed.gov/college
2. Eckardt, A., & Angerer, C. (2016, February 17). Why American Students Are Flocking to Germany – and Staying. Retrieved from https://www.nbcnews.com/news/world/why-american-students-are-flocking-germany-staying-n515961
3. Henry. (2019, July 28). 5 Countries with Free College. Retrieved from https://www.uopeople.edu/blog/5-countries-with-free-college/
4. Nitro College. (n.d.). Average Student Loan Debt in the U.S. – 2020 Statistics. Retrieved from https://www.nitrocollege.com/research/average-student-loan-debt
5. Thune, S. J., & Warner, S. M. (2019, August 27). How Congress Can Ease Americans’ $1.5 Trillion Student Debt. Time Magazine. Retrieved from: https://time.com/5662626/student-loans-repayment/

Many students today are faced with an unending monthly payment of school debt. 44,200,00 Borrowers owe $1,520,000,000,000 in student loan debt and the question is how did we end up here? How did we let this happen to our society where so many people owe money for seeking an education? Fact is, is that our government and money lenders make it extremely easy to acquire student loan debt. According to Experian data, the student loan debt has increased by 116% in the last 10 years. In this essay I will argue why our society needs to address this issue and give ideas as to how to reduce student loan debt. Many people are not worried about this and will say things like “just get a job and pay for it’ or “It’s not my problem”, but this problem affects everyone and the country as whole. Scholarships and grants are an option for people but not everyone benefits from this and with transportation and personal technology that is increasing to be able to engage in regular schoolwork, people are becoming more stressed out with anxiety and depression on the rise with each semester. Reducing school debt or reducing the amount that schools charge is extremely important to bettering student’s mental health and in turn will help the country’s economy.

It seems like this mess started as a result of world war 2 and the government wanted to give people more access to higher education. In the 1950s Massachusetts Higher Education Assistance Corporation (MHEAC) started a loan program that helped students pay for college. The corporation promised the banks that if the students failed or dropped out, that they would pay them back in full. They quickly realized that raising enough money to put every student in college was near impossible. Another bill was passed to help students pay for college called the National Defense Education Act (NDEA) which became the first large scale student loan program. This act was used to get more students to study in things like sciences to help in our defense in the cold war. According to congress this was a no brainer for them, the act would create better technology and better job opportunities for the united states. Little did they know, these decisions would cost the country trillions and put many people in difficult situations. The rise in tuition and fees increased over the years at a frightening rate. Student loan debt had increased so much during the 70s and 80s, and even with the help of scholarships and tuition aid, things were getting out hand. Why was this happening? Because students are treated more like customers rather than human beings trying to obtain higher education. One of the biggest problems in the United States in student loan debt. According to an article written by Jennifer Wadia, in 2010 student loan debt had reached 830 billion which was the first year that exceeded another personal debt, credit card debt. Currently there’re 37 million with similar amount of student loan debt and half of these students are unemployed that had graduated with bachelors. When you graduate from college, you’re required to start paying your student loan and with that, many come out jobless or are working in low paying jobs with payments every month. Many of these students can only make minimum payments on their student loan debt and with interests’ rates that are so high, that students will be paying their debt for the next 20 years. Bankruptcy is not an option either, so you have no choice but to repay what you owe. As you can see, these are some of the reasons why students now a days have such a hard time mentally wise, when attending college. I believe this problem in the united states will destroy the American dream.

A widespread reexamination also requires denying a myth. Some economists may want to elude this epidemic, but the student loan crisis is real. The actual narrative? Too many Americans believe that “college is affordable.” Not only are their naysayers about this problem but many think student loan debt forgiveness is a bad idea. Conservative’s believe that this will be a bailout for the elites, But This entire debate has been wounded from asking the wrong question. The question isn’t how much student loan debt we can forgive; it’s how we got here in the first place. The response is clear: Government. Meanwhile the development of student loan programs outside their original intent of manufacturing admission for low-income students, government has done what government always does: constructed a control for itself, successfully eliminating private lending. The consequence has been high tuition rates, powered by structural expand and horrible construction projects. Twenty-first century higher education outlay has little to do with the teaching of students. Resolving this issue, like any government made mess, will take time and willpower. Students who are borrowing also need to know up front how financial aid might fall short and obtain a list of other bases which might help cover costs. Those properties should include the emergency food and shelter programs that already help students. Few know about that help, mainly the students who find themselves unable to use their family’s welfare helps because they are enrolled in school full time. Studying those community programs’ rules would assuredly help students, but so would changing the tax code to exempt students’ inadequate wages.

Objective like the Republican attitude on student loans replicates conservative faith in the free market, the 2016 Democratic Stage bonds the liberal belief that government can deliver the answers. The stage calls for “bold new investments by the federal government” to brand “debt-free college a reality.” In a liberal move, Democrats today support that families making under an unnamed quantity should not have to pay tuition for their teen to join public colleges or universities. The stage also pursues to release the weight of students who now contend with “crushing student debt.” The Democrats say that, if nominated, they will license anyone with student debt to refinance their loans. In other words, if you established your loans at a period when interest rates were higher than they are today, you could refinance your loans and pay the lower rates. The stage also cries for dropping interest rates for upcoming undergraduates, increasing access to income-based repayment, starting a “student borrowers bill of rights” and permitting borrowers to release their student loan debts when they declare bankruptcy. Opponents of the stage have accused Democrats of pandering to college voters by contribution of impractical or unbalanced deals. Minnpost stated, refinancing loans might not stand as a reasonable rule: “Some policy experts, and not just on the right, argue that lowering rates for nearly all student borrowers is an unnecessary subsidy and waste of money that could be better used elsewhere. “As the Huffington Post described last month, some trust the Democrats’ strategy to deliver free tuition to low-income student disregards the big role that distinct states play in making obtainable education.

One question seems to be floating around by very few. Can obtaining a college degree be worth suffering substantial debt? Everyone has their individual opinion. But if you said yes, then some good arguments would have to be made and an understanding as to why and how to utilize it wisely. The grounds for this are holding a college degree gives you an improved chance in life and a better or higher wage. At the beginning, it won’t appear like it when you are paying off your student loan but after you can see the benefit’s. In Truth it can be worth obtaining important college debt if you do it the right way. The grounds for obtaining a college degree is deserving, and experiencing important debt because it gives you a better chance in life if done right. For example, many students don’t have an idea of what they want to do in life. Many younger students that go to a 4 year end up changing their major and prolonging and adding to their school debt. Many students drop out for various reasons and have to put college on hold. If these things weren’t a factor, and if all students somehow knew exactly what they wanted to do in life, then acquiring student loan debt would not be a problem. Of course, that isn’t a reality and will never be one because we as humans change. 3 years from now you can decide to be one thing then be bored of that occupation and want to do something completely different, and unfortunately students pay for this kind of decision.

My thoughts on this is that we need to address this issue. In my opinion, the more we complain and write about this issue, the more people in the united states will notice. It’s something we need to address to democrats and republicans over and over again. I believe both parties want to solve this issue, but in todays America, things are so divided that neither can come to a conclusion. I don’t believe that students should suffer to obtain a better education. Our government created this problem but it seems that it is up too us as regular citizens to figure out a way to resolve this issue. There is enough proof that student loan debt is a problem. Its not only a problem for students but for the entirety of this great country. One day our government will be forced to deal with this problem and I hope for the country’s sake, we aren’t too late.

Student Loan Debt the fear of many young adults that are going to proceed their education and attend college/university. As you begin high school you are introduced to the world of being a young adult that comes along with many responsibilities and a glance of what your future might await academically meaning your college or university of choice. Although the tuition may be very expensive, some students have the advantage that they don’t have to worry about it but there will always be others that don’t have it so easily. Which can be a problem because even if there is student loans that means you will have debt and just because of that reason many students would rather not attend college or take out student loans. What exactly student loans and financial and what requirements do you need to qualify to be able to obtain it. Also, people across the income, age, and educational attainment spectrums have student loan debt, but it is particularly concentrated in some groups. There are many other problems that the debt causes like depression, anxiety, etc. because students/graduates are worried about how they will pay it off which can lead to mental health problems that can affect permanently.

Firstly, A loan offered to students which is used to pay off education-related expenses, such as college tuition, room, and board at the university, or textbooks. Many of these loans are offered to students at a lower interest rate. In general, students are not required to pay back these loans until the end of a certain period which usually begins after they have completed their education. Students who would be most likely to receive financial aid are those who have good grades in high school, and standardized aptitude test scores. Depending on who someone is working with for their financial aid they would have the special requirements they need to meet their expectations to be able to receive help. Which would later be paid by their rules with interest or no interest or just depending on the help someone is getting.

Secondly, when high schoolers are in the beginning process of finding the possible college they will be attending. One of the many things high schools have to offer to the students having the ability to sign up for financial aid (student loans). Although it is pretty great if you get the financial aid many students start to realize that, that loan will turn into debt and if they don’t want to be in debt in the future they will most likely not want to attend college anymore as seeing the outcome of the financial aid especially low-income students since they do not want to be left with that burden. One source said “Surprising numbers of low income students – 850,000 a year, or 26 percent, according to the American Council on Education – don’t apply for federal aid at all …these students are eligible for more need-based grants plays a role, as does their tendency to attend lower-cost institutions. But debt aversion may also play a role, particularly when it explains the choice of a low-cost institution in the first place.” (Burdman).

Thirdly, when it comes to the student debt it’s not just graduates who are left with the debt there is certain groups. An article by the Urban Institute on who has student loan debt they said “The 20 % of U.S. adults age 20 and older who have student loan debt are a varied group: young and old, white and nonwhite, men and women, low income and high income, college-educated and not. The likelihood of having student loan debt does, however, differ significantly across these subgroups.” These subgroups being; Education, Income, Age, Kids, Gender, Living arrangement, Employment, and Race/Ethnicity.

So who has student loan debt? Based on age the people with a higher percentage that have student loans range between the ages of 20-29 and 6 percent of people that are 60+ years old still have debt. On an education level the most probable people that would have student debt are people with a higher education than high school and people with a College Degree since they attended all the years necessary to graduate the more loans they needed the more debt they would have, on a percentage they are 30 percent of people that have student debt if they obtain a higher education. “Overall, 27 percent of Americans with at least some college education have student loan debt, with the numbers ranging from 56 percent of 20–29-year olds to 6 percent of those age 60 and older higher from any other education received….African Americans and Hispanics are about twice as likely to have student loan debt as whites. While 16 percent of whites have student loan debt, 34 percent of African Americans and 28 percent of Hispanics do so.”

College students encounter a series of complex financial decisions as they determine how to fund their college education and the impact that financial concerns have on these students is uncanny ranging from anxiety, depression, stress, etc. “High levels of debt have a negative psychological impact on college students. Lange and Byrd (1998) found that high debt levels were associated with lower self-esteem and a decreased sense of ability to manage personal finances” says an article talking about financial anxiety. As you go through certain points/stages of your debt depression will come and make you undergo a terrible feeling like you are never going to be able to pay it back and you feel hopeless. “These thoughts can have detrimental effects on borrowers with debt affecting mental health as well as hindering their repayment progress …Student loan borrowers may be worried about how they will pay it back, how their loans affect their future goals and their current reality. It can feel totally overwhelming to manage the day-to-day expenses of life on top of hefty debt payments.” Not just any students/people are the ones most concerned about student debt but people with a low-income they have more to worry about. If they are not gaining enough money to support themselves and pay off debt it cause more stress and people who actually have a high-income pay. “People in lower-income households are substantially more likely to have concerns about their ability to repay their student loans. Compared with people in households with incomes above $100,000, people in households with incomes below $25,000 are 86 percent more likely to worry about repaying their student loans. The concern is nearly as great for people with incomes between $25,000and $50,000; they are 72 percent more likely to worry. In comparison, those with incomes between $50,000 and $100,000 are 29 percent more likely to worry about student loan repayment than their counterparts with incomes above $100,000” mentioned the article by the Urban Institute.

By all counts, and with proven results, although student loans/financial aid are great opportunities that are very much helpful for the help of gaining a greater education. In the long run, you are still left with the debt and overwhelmness of paying it may be because of a low-income, the age that you are at that isn’t your best it can cause some physiological problems when you are left with the concern of paying off your debt which can cause anxiety and stress.

Looking into the student loan debt crisis I found that the total student loan debt in the U.S. is $1.52 trillion. The average student loan debt for borrowers is $31,172 and the time it takes these borrowers to pay off their debt can be from around 10 to 30 years. We can see from this graph that the overall cost of college has increased 145% since 1971, while the median household income has only increased by 28% (Issa) which tells us it’s getting harder and harder for families to pay for college which only adds on to the student loan debt (Issa). (Graph shown above is from credit.com cited below) The total student loan debt equals up to 8% of national income! (Ingraham). So the question is how does student debt affect the economy?

Loan debt is delaying marriage/family. There was a study done in 2014, which “found a link between a woman’s student loan repayment schedule and marital timing. A $1,000 increase in student loan debt, researches found, lowered the odds of marriage by 2 percent a month among female bachelor’s degree recipients in the first four years after graduation.” (Ingraham).

Marriage is delayed from those not being able to afford their weddings because they are worried about paying off their student loan debt. Also, student loan debt is restraining the growth of small businesses. The Federal Reserve Bank of Philadelphia did a study in 2015 where they found that there was some sort of connection between the student loan debt and small-business formation (Ingraham). If someone is too busy paying off their student loan debt (considering the amounts are so high), then they are not able to get the cash needed in order to start a business. In the U.S. small businesses are responsible for 60% of employment (Ingraham). Without the creation of small businesses then the unemployment rate is going to increase making it even more difficult for those to pay off their debt. You can see in my graph below that with a lower percentage of businesses then the overall aggregate supply curve shift to the left from AS1 to AS2 which means it is going to decrease along with the real GDP moving to the left from Y1 to Y2. These two factors will make the unemployment rate increase because there is less people working and being able to produce goods which makes our overall economic growth for the economy decrease. Also, from the decrease in supply and real GDP it causes the price level for goods to increase from P1 to P2 due to the lower production of goods making the overall cost of living even higher for those who are already struggling to pay off their student loan debt. (see graph below)

Another effect from the student loan debt is the effect on the housing market. Debt was preventing over 400,000 families from purchasing homes found in a federal reserve report. There is a connection from trying to pay loan payments and then being able to put a down payment on a house is really difficult for people to keep up with. Finally, student loan debt is preventing people from saving for retirement. Due to the increase of monthly payments it’s difficult for people to put away money for the side and put it into their retirement funds. People are applying for 401(k)’s but its affecting how much people can actually put into those accounts. Some policies that can be put into place to try and help with the student debt are for one to forgive all federal student loan debt. This would mean that the government will forgive all outstanding federal student loans, the cost of this policy would be close to $1.5 trillion, but the effects would eliminate debt for all 43 million suffering in debt from their student loans (Miller, Campbell, Cohen, Hancock) Another policy could be to forgive a set dollar amount for all students. This policy would forgive the lesser of a borrowers student loan balance/set dollar amount. The dollar amounts would be chosen based on the amount of annual income a person makes every year and they would come to an average dollar amount that would help everyone. The cost for this operation would depend on all the of the dollar level chosen, for example if they chose to forgive $40,000 for all borrowers then it would cancel $901.2 billion (Miller, Campbell, Cohen, Hancock) Depending on the dollar level chosen and all of the money can be lifted and costing borrowers less money (Miller, Campbell, Cohen, Hancock). I find these two policies to be the most beneficial because it would end with all or almost all of the debt being lifted and helping a lot of people who are struggling to pay off their loans. Other policies that can be put into place can be to forgive the debt held by former pell recipients. Pell grant recipients are “college students determined by the federal government to be sufficiently low income to qualify for financial help that doesn’t not have to be repaid. In the case of students receiving the maximum award, there is an understanding that their family should not be asked to contribute anything for the price of college.” (American progress). This policy would help cancel all student loans only with those who hold a pell grant. The point behind this would be to consider that those with pell grants were never supposed to borrow because they wouldn’t be able to afford the aftermath.

There is no set cost on how much this policy would be. But, the policy would be beneficial to a lot of people as you can see In the graph below. It shows the share of borrowers who were given a pell grant depending on the year. (graph above from American progress cited below) This figure shows how many grant recipients there are and they cover the cost for half of the population. There isn’t a clear number of how many people this would be help but around 55 to 60% of students receive grants meaning this policy would help greatly (​Miller, Campbell, Cohen, Hancock​). Finally, the last policy that can be put into place is to reform the IDR and take on the interest growth in order to shorten the amount of time it takes to pay off student debt. Around 12 years ago, congress created a payment plan to help with unaffordable student loans. The plan would be to provide monthly payments to “how much money borrowers earn and provide forgiveness after some set period of time in repayment.” (​Miller, Campbell, Cohen, Hancock​). This program has become very popular but it does not provide the relief that many people were hoping to get. With the monthly payments piling up and the income not flowing in the interest only keeps going up making them have to pay even more than they did to begin with. The plan with this policy would be to take out the interest portion completely so it would not accumulate on them. Borrowers will start to make monthly payments equal to 10 percent of their income every month. Even though this may take people longer than 10 years it would be more beneficial because they would be making equal monthly payments along with not having the worry of paying off any interest. The plan to forgive all of the interest would benefit a lot of people in paying off their debt. There is no specific cost to how to much it would take to put this in place but it would help over 7.7 million people on the IDR plans. These changes would benefit greatly to those on the plan. These four policies would benefit so many people that are currently trying to pay off their student debt and just by having a little change can change the lives of so many people and help those get married sooner, start businesses, contribute to the housing market and so much more. ​We want people to attend college and increase their knowledge so when they come into the labor force we can overall increase the economy’s economic growth. If we were to implement any of these policies into place to help with the student debt, then the overall demand for college will increase causing the aggregate demand curve to shift to the right from AD1 to AD2. Increasing the educational labor force will also help shift the aggregate supply curve to the right from AS1 to AS2 causing the real GDP to increase from Y1 to Y2 and the unemployment rate to decrease creating more jobs for those because they are not worrying about paying off their student debt. With GDP increasing and unemployment decreasing this will overall help our economic growth immensely if we were able to help with the student loan debt. (see graph below)

Works Cited:

1. Miller, Ben; Campbell, Colleen; Cohen, Brent J.; Hancock, Charlotte et al. ‘Addressing The $1.5 Trillion In Federal Student Loan Debt – Center For American Progress’. ​Center For American Progress​, 2019, https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/​.
2. Ingraham, Christopher. ‘7 Ways $1.6 Trillion In Student Loan Debt Affects The U.S. Economy’. Washington Post​, 2019, https://www.washingtonpost.com/business/2019/06/25/heres-what-trillion-student-loan-debt-is-doing-us-economy/. Accessed 12 Dec 2019.
3. Issa, Natalie. ‘U.S. Average Student Loan Debt Statistics In 2019 | Credit.Com. ” Credit.Com, 2019, ​https://www.credit.com/personal-finance/average-student-loan-debt/​.
4. https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/
5. https://www.americanprogress.org/issues/education-postsecondary/reports/2019/06/12/470893/addressing-1-5-trillion-federal-student-loan-debt/
6. https://www.credit.com/personal-finance/average-student-loan-debt/

My main goal in this essay is to present to you three major problems (in my opinion and based from the research I have done) that student loan debt is having on an immense amount of people that we live amongst.

To achieve this goal, I organized my essay into four main sections. Two of which include sub-sections. In the first section, I presented three valuable factors that I believe student loan debt is having on individuals. Those factors include debt continuing to increase causing the economy to drop, debt being the largest form of personal debt, and how paying for education is failing the middle-class. In the second section I will discuss some statistics on how college is too expensive, and its result is the cause of major debt on individuals. Special attention is paid to (The argument for free tuition) found online. I end with a third section that will offer research questions that will be answered throughout my informative essay. Then, I conclude with a fourth section that is indicating the importance of clearing out student debt. I also include an appendix after the works cited that contains images of websites, blogs, and articles I examined. Before I can begin the examination of the work sites; however, I need to provide an ongoing pressed of issues that are still occurring historical events with student loan debts have been and still is a huge load on most individuals.

I. Historical context

In 1862, President Abraham Lincoln signed the Land Grant College Act into law, laying the groundwork for the largest system of publicly funded universities in the world. Despite some of America’s greatest colleges, including the University of Minnesota, were created by federal land grants, and were known as “democracy’s colleges” or “people’s colleges”. But that vision of a ‘people’s college’ seems awfully remote to a growing number of American students crushed under soaring tuitions and mounting debt. One hundred and fifty years after Lincoln made his pledge, it’s time to make public colleges and universities free for every American (by Keith Ellison).

Debt increases and economy decreases: Education debt has a major impact on more than 44 million of us (around 1 in 4) who owe $1.5 trillion total; therefore, making the burden of education the country’s second largest debt. Monthly student loan payments have increased drastically from $227 in 2005 to $393 in 2016 (according to the Federal Reserve and graduates owe $20,000 more than they did just 13 years ago). At this rate people will soon owe more for tuition and books than they do for houses and/or apartments.

Debt is rising tremendously causing the economy to go do Today’s headlines are replete with stories of Millennials who are postponing getting married, starting a family or even buying their first home—home ownership for Millennials stands at 37%, compared to 45% of Boomers and Gen-Xers when they were the same age. While some might disagree that Millennials just prefer renting, or that their job-hopping habits mean they don’t want to settle down in any one place, the fact is that the majority of them—53%—haven’t bought a home due to the fact that they don’t have the money for a down payment, according to the Urban Institute. They also found that with every 1% increase in student loan debt, the likelihood of owning a house decreases by 15% more and more (Forbes- how can we stop the economy).

After all, we haven’t even discuss on how student debt stifles entrepreneurship, not even or how debt-burdened folks will be more likely to work longer, thereby stressing the unemployment rate, or how the government is losing $170 billion on defaults and loan forgiveness (John E. Glrouard).

Debt, in fact student loan has become the largest form of debt: Student loan debt in 2019 is the highest ever in history. The latest student loan debt statistics for 2019 show how serious the student loan debt crisis has become for borrowers across all demographics and age groups. There are 45 million borrowers who collectively owe more than $1.5 trillion in student loan debt in the U.S. Student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans. Borrowers in the Class of 2017, on average, owe $28,650, according to the Institute for College Borrowers who submitted applications: 41,221. Total number of applications: 49,669. Number of applications approved: 423.Number of applications denied: 32,409. Number of applications denied due to missing information: 11,892ess and Success. Total U.S. borrowers with student loan debt: 44.7 million.

(ZackFriedmanhttps://www.forbes.com/sites/zackfriedman/2019/02/25/student-loan-debt-statistics-2019/#c55f1de133fb)

Student loan debt is one of the biggest problems in the United States at the moment. There are 1.6 trillion dollars of debt in the country and 44 million are in debt. That’s an average of $36,364 per person. College debt only started in the 80s and it grew very rapidly when President Ronald Reagan made cuts to social programs. Today, student loan debts are persistent because of lack of funding from the state governments.

Student loan debt is a hot topic among the 2020 political candidates. College debt in America is so high because of a chain reaction starting with a lack of funding from state governments. Student loan debt started in the early 1980s when President Ronald Reagan started making budget cuts to social programs. College grants dropped significantly, and need was reintroduced as part of eligibility for guaranteed loans. A 5% fee was imposed on borrowers and increases in the cost of tuition started to accelerate. People could say that loan volumes were up in the 1980s, so the budgetary assault couldn’t have been that detrimental. But really, this loan volume increase was coming in at rates slower than between 1978 and 1981. College was becoming more of a necessity in the 80s to get a good paying job, so some people absolutely needed the loans, thus making loan volumes rise.

Today, there are many things keeping student loan debt high. These reasons being a demand for higher education and an increase in financial aid for people of a poorer status. But mainly it is a lack of funding from state governments that start a chain reaction of student loan debt. The lack of funding causes college rates and tuition to go up which makes people need loans which causes debt. People can say that college interest rates went down in the 2019-2020 school year by .1%. But the cost of higher education is very inflated so this barely makes a dent in the tuition. The 2020 presidential candidates are talking about eliminating student loan debt completely. Bernie Sanders and Elizabeth Warren both have their own unique plans for getting rid of the 1.6 trillion dollar deficit. Although Warren has now dropped out of the race, her plan included people with incomes of less than $100,000 would get $50,000 of their student debt pardoned. “People who earn between $100,000 and $250,000 would be eligible for forgiveness on a scale” (Annie Nova ‘Big changes could be in store for student loan borrowers’ CNBC.com). The original $50,000 in debt relief drops by $1 for every $3 a person earns over $100,000. “And those who earn more than $250,000 would be ineligible for debt forgiveness” (Annie Nova ‘Big changes could be in store for student loan borrowers’ CNBC.com). Sanders’s plan was to just wipe out the 1.6 trillion dollar debt. Others are saying that without paying for higher education, the college is not going to make money. This is incorrect because the government would fund college. Free education has worked in numerous other countries like Norway, France, Iceland, Finland, and Sweden.

Overall, student loan debt is a major problem in the United States. The concept of it started in the 80s when social programs were cut by President Ronald Reagan. Now, the debts are getting larger because colleges weren’t getting enough funding, so tuition prices went up. Hopefully, in the future, other presidential candidates could end student loan debt. This is a significant topic because higher education is a major part of life today in the United States. Maybe we as a country can make college free like other European countries.

Within the next year, a majority of the people in this room will already owe roughly $20,300 in debt, a debt that will take roughly 9 years to pay off. How in the world can an eighteen-year-old accumulate this much in debt, you may ask? Well, the answer is – university fees. This debt, along with the cost of living increasing more and more by the minute, has left us young people option less in regards to our futures, having to enter the workforce immediately after graduating, rather than applying for university and receiving any form of higher-education, because it is just simply not affordable. I will be addressing the issue of university fees, and why they must be abolished in order to give everyone an equal opportunity to pursue their academic dreams, regardless of financial status.

Equity in opportunity for students has become problematic as a result of pricey university fees, having complete disregard for who is achieving the highest academically, and rather who can pay the most money. It is as though there is a system of favouritism in the works, assisting the advantaged rather than the disadvantaged in gaining academic opportunity and developing success – but shouldn’t this be the opposite, or at least to some degree balanced? There needs to be more thought given toward those who are less advantaged. For example, in September 2017 the Australian Bureau of Statistics recorded that there were 961,000 single-parent-households, accounting for 15% of all families in Australia. How are these families supposed to make ends meet, let alone pay for a university fee of $20,000 plus when they are already living on the poverty line? Why are we stopping so many people from reaching their full potential? It seems that we are now letting class define our future.

People often fail to recognise that by making university free, it is not only the students who would be benefiting but also the whole society. We are beginning to see that more of the jobs that are currently in high demand are knowledge based or require advanced technical skills. Therefore, wouldn’t a highly-educated more skilled workforce help Australia’s economy to grow faster? By having a higher-educated workforce in our country, more people will be able to attain employer-desired credentials, thus leading to more people acquiring higher paying jobs, allow people to spend more money, meaning millions of additional dollars circulating throughout the Australian economy. This will mean that a larger proportion of the population will be taxed more, leading to the government having more money to spend on free university.

The opposition has often argued that if we abolish university fees, people will not take university seriously. Do you really think a person – who already seemingly has a bad work ethic and an immature mentality considering they do not want to take their higher-education seriously – will waste their time applying for a university, where they will then consistently have to write five-thousand word essays and attend lectures multiple times a week? No sane person with the ability to think with logic and reason would want to put themselves through that if they did not want to seriously be there, and besides; a majority of people will be there for the right reasons.

Although the issue of university fees is primarily an economic one, it is also a philosophical one. Australia is a nation which stands for equality, however our education system does not represent this. In reality, one’s ability to achieve their full potential is dependent on their social standing. Social mobility has been eroding for the poor and middle class, leading to an even greater social divide between classes. One idea that came to me, which would tie in well with this paragraph is mentioning how the glorious ‘Australian dream’ is essentially limited to the wealthy, and how equal opportunity and getting a ‘fair go’ was an enticing incentive for our parents to migrate here, however instead, they, and now us, are confronted with this disarming reality – this would add an emotive element that your classmates can resonate with.

Even after being accepted into a university course, students often are not allowed the opportunity to reach their full potential as they are constantly worrying about how they are going to scrape together enough funds to meet their fees. Without fees, students would be able to focus more on their studies, allowing them to graduate on time, ready to enter straight into the workforce rather than having to worry about having to pay off thousands of dollars of fees. This means that people would have more freedom to pursue their dreams and ambitions and start the next chapter of their lives, leading to happier people and a more prosperous nation as a whole.

It is often argued that free university will lead to jobs becoming overpopulated, causing a downfall in salaries, however we need to remember that every year people retire and leave their line of work? With so many people leaving for various reasons, there is room for younger, more enthusiastic workers, providing new perspectives.

The main argument against free university is that such an idea is too expensive and there is simply no way the government can afford to pay for it. However, the government could pay for university fees if a few reasonable changes were made. This could include closing corporate tax loopholes that allow companies to legally avoid paying their full share of taxes, increasing the tax rates for Australia’s wealthiest millionaires and billionaires, diverting money currently spent on student financial aid and cracking down on wasteful government spending.

To conclude my arguments, I want to leave you guys with a thought. How would you feel if you were denied your basic human right to education because you don’t have enough money or you’re too scared to put yourself into debt? How is this fair? Wealth shouldn’t be able to deny you of your learning and most definitely should not be the deciding factor of whether you achieve your dreams or not.

Many high school graduates and young adults often feel pressured to pursue a college degree or attend college for the ‘experience’ itself. However college tuition is at an all time high and student loan debt is at its peak so much so it’s drawing the country’s attention. People like Josh Kirdy a college graduate, are hustling to try and keep up with their student loan debt. When Josh is not laboring as an assistant retail manager which he does full time at Universal Orlando, the 26-year-old is on the lookout for side work and opportunities to make more cash, for example dog sitting and any hours he can get in at his local mall. Business Insider says: “He formulated this ‘juggling act’ to put money towards his thirty seven thousand dollar student loan debt”. “I’m happy with my life today and with the education I received, but it’s unfortunate that I’ll be paying for it for another seven years at least”, Kirdy, who took part in a four year public institute. Based off Business Insider, Kirdy is on track to reimburse around three hundred a month in student loan payments until he is thirty five.

According to Business Insider, college tuition has doubled if not more since the 1980’s. “More than 45 million Americans with student loan debt and contributing to a whopping national total of $1.5 trillion”, according to student loan hero. “The average student debt per graduate who took out loans is higher than ever, at twenty nine thousand eight hundred”. “I feel like buying a house is a total pipe dream at this point in my life, but I’m tightening my belt as much as possible to save for a down payment right now”, is a statement from a water resources engineer, one who graduated from a public university with a rough estimate of twenty five thousand in debt. A man by the name of Boone Porcher owes $32,645 after five years at a public university. He began “paying double his minimum payment two years after graduating in order to pay off his debt in a time span of five years’. What’s led to this?

When looking into student loan debt it’s hard not to come across debt.org where it says that “student loan debt is accelerating so fast that it has become a burden on the U.S. economy. The Federal Reserve Bank of New York said in February of 2017 that student loan debt rose for the 18th consecutive year and that borrowing for higher education has doubled in just eight years”. In an article on debt.org it states: “Student loans are an issue in the 2020 presidential campaign as Democratic candidates compete with ideas to lower the burden on borrowers. There are good reasons for the concern. Soaring student loan debt has been correlated with delayed marriages, a drag on new business formation, a reluctance of Millennials to buy homes, an inability to build emergency funds and delays in building retirement savings accounts”.

“Unlike most other forms of debt, student loans aren’t dischargeable through bankruptcy, this means borrowers are obligated to make payments even if they don’t have the income”. “People default for a variety of reasons, but job loss or failure to land a position that pays enough to make loan payments are common problems. Student debt is a multi-generational problem”. Willing parents, grandparents and so on sign their names on loans. “If the student can’t afford to pay, the debt suddenly becomes a family issue”. Another article on debt.org chimes in adding the fact that “Of course, people borrow money for all sorts of reasons. In this case, it’s to pay for the cost of higher education, which typically leads to higher-paying careers that should afford graduates the ability to pay off their debts and live more affluent lives”. A very significant reason as to why family members often do their best to contribute under this hope their loved one or family member will make a sustainable and successful future out of the money being provided.

In conclusion, to an issue that has been ongoing for quite some time “Student loan debt is a reality for more than 1 in 4 American adults. There are 44.7 million people with active student loans in the U.S., and the overwhelming majority of them are under the age of 60. The most recent figures from the U.S. Census Bureau estimated there are 171.3 million adults in America between the ages of 20 and 59. That means paying off student loans is a common challenge for 26% of younger adults under age 60”. On top of this “A Bankrate survey of college graduates published this year found that 73% of respondents had put off “at least one major life milestone” due to student debt”, says Max Faye in an article on debt.org. Student debt is such an imperative issue in America that action needs to be taken in.

In modern-day society, a post-secondary degree is needed to compete for a well-paying job in the labour market. Higher education is viewed as a necessary long term financial investment to better oneself in their career, however, in reality, it is often a financial risk for students. Student loan debt is an unfortunate norm for many students who choose to pursue post-secondary education. Tuition for higher education is quickly increasing, and as this incline continues, many students are unable to pay for their education on their own. As a result, these students must borrow money through the form of loans to finance their education.

Student loans typically have high-interest rates, which sends borrowers plummeting into a downward spiral of accumulating debt. This is a common reality for students, as ‘almost 70% of US college students borrow to finance their degree, amounting to an average debt burden of $28,950 for four-year graduates’ (Despard et al. 2016). This ongoing trend of student loan borrowing has become a global financial crisis, impacting both postgraduate students and the overall economy. Cumulative student debt has now surpassed credit cards as the largest form of consumer debt worldwide (Despard et al. 2016). Students are faced with seemingly insurmountable debt once they graduate from post-secondary institutions, which continues to accumulate until the full loan and its accompanying interest is repaid. Since student loan repayment begins almost immediately after graduation, it forces ‘graduates to make employment decisions based on what can best contribute to loan repayment’ (Canadian Federation of Students, 2015). Countless postgraduates are not in a secure financial position to pay off their student loans until many decades after receiving their degree. This trend of immense student debt has profound effects on the financial wellbeing of individuals for the rest of their lives. Student loan borrowers are faced with greater financial difficulty in their future due to the debt they possess.

Student loan debt has a diverse array of future consequences such as decreased net worth and reduced ability to start a family and purchase a house or other assets. These impacts were proven in a study conducted by R.M. Despard. The authors examine the relationship between student debt and material, healthcare hardship and financial difficulty among a sample of LMI (low-to-moderate income) households. The researchers conducted a study with an analytical sample of 5558 participants that obtained a university degree. Participants were categorized depending on whether or not their completion of a university degree was accompanied by student debt. Propensity score analysis measures were used to balance the sample on factors associated with loan borrowing for postsecondary education, such as age, gender, income, and the number of adults and dependents in the household. This method reduces selection bias that might affect the relationship between student debt and financial hardships. Each participant was given a survey and instructed to give a detailed assessment of their demographic characteristics and financial circumstances. The findings of this study concluded that participants with higher student loans have a greater likelihood of financial hardship and social and economic disadvantages. Those with student debt also tend to have difficulty meeting basic needs such as ‘housing, food and healthcare’ as well as difficulty managing general finances and bill payments (Despard et al. 2016).

Elliot and Lewis analyze research conducted from multiple studies to prove the ‘correlational relationship between student debt and students’ financial outcomes’ later in life (Elliot & Lewis, 2015). Multiple studies were conducted by a variety of researchers using different methods and samples. Each study analyzed several different financial outcomes, such as net worth, homeownership, and asset accumulation, etc. affected by student debt. The collective data from the many studies conclude that there are ‘long‐term, volatile, and often hidden effects of student loan dependence’ (Elliot & Lewis, 2015). Indebted post-secondary graduates have a lower net worth, less home equity, and more difficulty accumulating assets, when compared to other individuals with the same level of education but no student debt. This article supports the research paper, as it examines and proves that the financial wellbeing of postsecondary graduates is greatly impacted by student debt.

Luang examines the financial position of student loan borrowers compared to non-borrowers post-graduation. The conducted study uses the Survey of Labour and Income Dynamics (SLID) and the Survey of Financial Security (SFS) to compare income, savings, retirement pension plan investments, homeownership, mortgage, and total assets, debts and net worth for student loan borrowers and non-borrowers (Luang 2010). The sample population of each survey included postsecondary graduates between the ages of 20 and 45, who were no longer attending school. The findings of this study conclude that non-borrowers were in a better financial situation post-graduation than student loan borrowers. Those who had student debt were less likely to have savings and investments, own a home, or have adequate wealth accumulation. There was not, however, a significant difference between borrowers and non-borrowers ‘in terms of employment rates, total personal income and the likelihood of having an RPP’ (Luang, 2010). The researcher hypothesized this is because the education level of postgraduates is the strongest correlate of employment and income levels, thus a similar return on education between postgraduates, regardless of their student loan borrowing status. This article supports the research paper, as it shows the debt held by student loan borrowers affects their finances for years after their postgraduate education.

This research paper identifies the common effects and consequences of student debt, focusing on the financial implications presented by student loans. The annotated articles each have a different approach towards examining the effects of student loan debt and prove the hypothesis.

Annotated Bibliography

1. Despard, M. R., Perantie, D., Taylor, S., Grinstein-Weiss, M., Friedline, T., & Raghavan, R. (2016). Student debt and hardship: Evidence from a large sample of low- and moderate-income households. Children and Youth Services Review, 70(Complete), 8-18. http://dx.doi.org/10.1016/j.childyouth.2016.09.001
2. Elliott, W., & Lewis, M. (2015). Student Debt Effects on Financial Well-being: Research and Policy Implications. Journal of Economic Surveys, 29(4), 614-636. doi: http://dx.doi.org/10.1111/joes.12124
3. Luang, M. (2010). The financial impact of student loans. Perspectives on Labour and Income, 22(41), 29-42. Retrieved from http://libaccess.mcmaster.ca/login?url=https://search.proquest.com/docview/742950423
4. Student Debt in Canada: Education Shouldn’t be a Debt Sentence. (2015). Retrieved November 10, 2019, from https://webcache.googleusercontent.com/search?q=cache:ug0L-t4AT0 8J: https://cfs-fcee.ca/wp-content/uploads/2018/10/Factsheet-2015-05-Student-Debt-EN.pdf+&cd=1&hl=en&ct=clnk&gl=ca.