The Rapid Increase of Student Loan Debt BY: NOAH STOERZINGER

What can the United States do to lower student loan debt percentages?

While not much can be done by the United States, they can do things such as implement free college but that would increase citizen taxes. Bob Sullivan, a writer for Credit.com states, “The CFPB is advocating for new rules that would protect student loan borrowers; these could ease the burden on the over-60 student loan debtor group. These rules income driven payment plans would be easier to maintain.” This shows that strides are being made to free up money for incoming students and making it easier for students to have lower or no student loans for a long period of time. Bob Sullivan also states, “ The number of Americans 60 or older with one or more student loans quadrupled from 2005 to 2015.” From this we know that student loans are increasing at a rapid rate. Also, most of the things that can be done, can be done as students. Using a cosigned, signing up for Autopay are some of the things that can be done.

What can college universities do to prevent major student loan debt after graduating?

While most colleges raise the marketability of tuition only to make student loan debt higher, universities have begun to push students to certain programs or ideas that can lower these debts. Universities have begun to offer new, and more scholarship opportunities for new students as well as offering jobs for students to work on campus to pay for their tuition. They have also pushed students into using prepay loans. Mark Kantrowitz, a writer for Money Magazine writes, “It is therefore imperative that the federal government and the colleges and universities begin tracking the percentage of their students who are graduating with excessive debt each year. This information can then be used to improve student loan counseling.” This is crucial for universities to check into because helping students improving their student loan knowledge is the first step in creating a lower student loan debt percentage. In an article on CNBC, Mark Kantrowitz also states, "Fundamentally, you either have to increase other sources of money besides loans, or you have to reduce the cost.” While certain strides are being made to try and reduce to cost such as getting a job or applying for scholarships, increasing other sources of money for your tuition is another option such as getting a job, asking family or friends, etc. All these ways can help reduce the cost of student loans after graduation and can also lead to finding out how portant increasing the amount of student loan debt.

What is increasing the cost of tuition and raising student loan debt?

While most people blame the rise in faculty cost and need for recreational activity sites for the rise in college tuition, the main reason is the rising student aid accounts. Student aid accounts offering more money for students to borrow, then, colleges bump up their cost. Ellen Wexler, a writer for Inside Higher Ed writes, “ Student aid accounts for most of the tuition increases between 1987 and 2010, according to a working paper from the National Bureau of Economic Research. The more money students can borrow, the idea goes, the more colleges can charge.” Wexler states that most of tuition increase is because of student aid, with only partial increase of tuition due to rising faculty and amenities cost. According to Business Insider, from 1980 - 2014, tuition rose 260%. Business Insider also credits student aid as a main reason why college tuition is taking a massive increase. The more students borrow the more colleges charge. What a real question for students is, if many people can’t get education because of cost, why are colleges continuing to raise their tuition?

Why are colleges continuing to raise tuition if more people need an education?

At many big universities, these programs are competing for top students and athletes to better their university. This means creating top faculty facilities, recreational facilities, paying for big coaches salaries. John W. Schoen, a writer for CNBC writes, “The cumulative cost of college sports including generous coaching salaries—has also raised concerns, especially when tuition subsidizes money-losing programs and increases the financial burden on students who don't take part in athletics.” This becomes difficult for students who don’t participate in any sports. The ones their strictly for academic purposes are still paying the increased tuition for something they don’t even take part in and will not affect them. A statistic from the Delta Cost Project state that public and private colleges have raised their academic payroll 28% from 2000 - 2012. The rise in the payroll is to accommodate for the increase in need for high level professors which will attract top students to the university. These new programs increasing tuition have not only raised many eyes over why universities need to spend so much as well has affected students socially and mentally with these immense student loan debt.

What does the future look like for increasing student loan debt?

College tuition is going to continue to soar while lawmakers cut back on loans and scholarships making education more difficult to achieve to receive a job and income. With the need to continue to bring many new top students and athletes, universities will continue to build new facilities and hire new top staff which will continue to raise tuition to help pay for it. In an article from USA Today it states, “ Tuition prices have gone up four times faster than the consumer price index.” Tuition prices will continue to soar, leaving it very difficult for students to get their education they need. While the growth of tuition prices has decreased, the amount will continue to rise. Amanda Reaume, a writer for Credit.com states, “While the slowing growth of tuition prices is something to cheer, the fact that the price a student pays has increased doesn't give a lot of confidence that anything will change on its own. It's about time something is done to increase college affordability.” Reaume states nothing will change on it’s own. Numerous attempts have been made to help the affordability of college for young students but the end result is still an increase in tuition prices. This is not an issue that can be stopped on it’s own and needs a solution to help make college affordable.

Works Cited

Article 1:

Sullivan, Bob. “70 Years with almost 180K in student loan debt.” AJC, Credit.com, 18 Jan 2017, http://www.ajc.com/business/consumer-advice/years-old-with-nearly-180k-student-loan-debt/2wwja22wSSPASexbKkDCCO/?scrlybrkr=666eab3a

Article 2:

Kantrowitz, Mark. “Why the Student Loan Crisis Is Worse Than People Think.” Time.com, 11 Jan 2016, http://time.com/money/4168510/why-student-loan-crisis-is-worse-than-people-think/?scrlybrkr=cb739fef

Article 3:

Lafferiere, Tyler. “When Federal Interest Rates Increase, Students Save.” The Daily Evergreen, 11 Jan 2017, http://www.dailyevergreen.com/opinion/article_dd376eee-d39a-11e6-935a-033e3e9f13b8.html

Article 4:

N.A. “Student Loan Consolidation Center Student Loan Trust I Announces Increase of Tender Cap for and Extension of its Dutch Auction Tender Offer for a Portion of its Student Loan Asset-Backed Auction Rate Notes.” PR Newswire, Proquest, 08 Mar 2011, http://search.proquest.com/news/docview/855823054/4301D0D7FAC043BAPQ/1?accountid=42214

Article 5:

White, Rachel. “The Debt Crisis No One is Talking About.” Hearst Magazines, EBSCO, http://web.b.ebscohost.com.proxy.elm4you.org/ehost/detail/detail?vid=3&sid=0611b1b6-a3b3-4282-bd51-9ec5f5d2f4e1%40sessionmgr101&hid=130&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=87000079&db=keh

Article 6:

Smartinvestingrecap.YouTube. YouTube, 11 Aug. 2016. Web. 06 Feb. 2017, https://www.youtube.com/watch?v=ynvjhfJHsqg&scrlybrkr=2bdf9b02

Glossary

Cumulative - Increasing in degree or quantity

This word is used to describe the growing tuition. Cumulative is another to use instead of growing or other synonyms.

GDP - Gross Domestic Product - How much money accumulated annually.

This group of words is used to understand the economy. The GDP is affected with the lack of highly educated workers in the workforce.

Caveat: a warning or proviso of specific stipulations, conditions, or limitations.

In the paragraph that this word was in it was talking about increased debt of students. This word is just another word to help us understand the warning that it is creating for students.

Portant: a sign or warning that something, especially something momentous or calamitous, is likely to happen.

Similar to caveat, this word is another type of warning. The word is used to warn about the increased student loan debt.

Cosigner -

A cosigner is someone who guarantees that if the borrower can't pay back the money the loaner gave them, he or she is legally responsible to pay it all back.

This word helps us understand the borrower and the loan. Legal action to can take place if someone can’t pay back the loan.

Marketability -

the ability of a commodity to be sold or marketed.

Marketability is a key word to the article. The meaning helps us understand the market for loans and how it works. Marketability in the article explains getting a job after getting a degree. This article shows the struggle it takes to do that and marketability helps us understand better in this case.

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