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Student Loan Debt Essays

Student loan debt essay topics and outline examples, essay title 1: the impact of student loan debt on higher education.

Thesis Statement: The growing burden of student loan debt has far-reaching consequences, affecting not only individual borrowers but also the accessibility and affordability of higher education in the United States.

• Introduction
• Rising Student Loan Debt Levels
• Barriers to Accessing Higher Education
• The Impact on Career Choices and Financial Stability
• Potential Solutions and Policy Reforms

Essay Title 2: The Psychological and Emotional Toll of Student Loan Debt

Thesis Statement: Student loan debt can take a severe psychological and emotional toll on borrowers, affecting their mental health, relationships, and overall well-being.

• The Stress and Anxiety Associated with Debt
• Impact on Personal Relationships and Life Choices
• Strategies for Coping with Student Loan Debt Stress
• The Need for Mental Health Support

Essay Title 3: Exploring Solutions to the Student Loan Debt Crisis

Thesis Statement: Addressing the student loan debt crisis requires a multifaceted approach, including policy reforms, financial literacy education, and innovative repayment options, to provide relief for borrowers and future generations.

• Policies Aimed at Reducing Student Loan Debt
• Empowering Borrowers Through Financial Education
• Innovative Repayment Plans and Loan Forgiveness Programs
• Ensuring Affordability and Accessibility of Higher Education

10 Student Loan Debt Essay Topics

Exploring solutions to the student loan debt crisis is crucial for mitigating the financial burden on graduates and ensuring access to higher education. The following essay topics delve into various facets of this issue, presenting opportunities for problem-solution exploration:

• The Role of Federal Policy in Mitigating Student Loan Debt
• Innovative Repayment Plans.
• Private Sector Solutions for Student Loan Debt
• Educational Reform for Affordable Tuition
• Financial Literacy and Student Loan Debt
• Community and Technical Colleges as a Solution to High Student Loan Debt
• The Impact of Scholarship Expansion on Student Loan Debt
• Bankruptcy Law Reforms to Address Student Loan Debt
• Public Service Loan Forgiveness Program Enhancements
• Technology-Based Solutions for Student Loan Management

Student loan debt in the United States has reached unprecedented levels, with millions of Americans grappling with the financial and emotional strain of repaying their education loans. This crisis not only hampers individual financial growth but also has broader economic implications, restricting consumer spending and contributing to wealth inequality.

Problem-solution essays on student loan debt offer a platform to investigate the roots of this issue and propose innovative solutions. From federal policy reforms to grassroots financial literacy programs, these essays explore multifaceted approaches to alleviate the student loan debt burden. By examining successful case studies and drawing on expert analyses, students can present comprehensive strategies that address both the immediate challenges of loan repayment and the systemic issues of higher education financing. Through such discourse, we can begin to envision a future where higher education is accessible and affordable for all, free from the shackles of debilitating debt. For those looking for problem solution essay examples offered free , ample resources are available to guide and inspire comprehensive solutions.

Apprenticeships as a Solution to Skills Gap, Student Debt, and Career Dead Ends

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The Impact of Current Events on College Students

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The Student Loan Problem in America and Ways to Solve It

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The Issue of African American College Students Loan Debt

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Student loan debt refers to the financial obligation incurred by individuals who borrow funds specifically for educational purposes. It is a type of debt that students accumulate to cover the costs of tuition, fees, books, and living expenses during their pursuit of higher education. Student loan debt typically consists of borrowed money from government-based programs or private lending institutions, which students must repay over a specified period of time, often with interest.

Student loan debt in the United States has reached staggering levels and has become a pressing issue in today's society. As of recent data, the total student loan debt in the US exceeds trillions of dollars, making it one of the largest sources of debt for Americans. Many factors contribute to the current state of student loan debt, including rising tuition costs, limited access to grants and scholarships, and the increasing number of students pursuing higher education. The burden of student loan debt has far-reaching consequences for individuals and the economy as a whole. Many borrowers struggle to make timely repayments, leading to financial strain, delayed milestones such as homeownership or starting a family, and limited career choices. The ripple effects extend to the broader economy, affecting consumer spending, saving rates, and overall economic growth. Efforts to address the student loan debt crisis are underway, including income-driven repayment plans, loan forgiveness programs, and increased financial literacy initiatives. However, the magnitude of the problem necessitates further attention and comprehensive solutions to ensure that higher education remains accessible and affordable while mitigating the long-term impact of student loan debt on individuals and society.

Student loan debt has a significant historical context that spans several decades. The roots of the issue can be traced back to the mid-20th century when higher education became increasingly expensive, leading to a surge in the need for student loans. In the United States, the establishment of the Federal Student Aid program in the 1960s aimed to provide financial assistance to students pursuing higher education. However, the situation evolved over time, and the accumulation of student loan debt became a pressing concern. During the 1980s and 1990s, tuition fees continued to rise, and the availability of federal grants decreased. As a result, students increasingly relied on loans to finance their education. The early 2000s witnessed a further expansion of the student loan market, with private lenders entering the scene alongside the government-backed loans. This expansion brought about changes in lending practices and the increasing burden of debt on students.

The influence of student loan debt extends beyond the individual level and has a profound impact on various aspects of society. Firstly, it affects the financial well-being of borrowers, often causing stress, limited financial freedom, and delayed milestones such as homeownership or retirement savings. The burden of debt can also impact mental health, creating anxiety and depression among borrowers. On a broader scale, student loan debt influences the economy. High levels of debt can hinder consumer spending and savings rates, affecting economic growth. Graduates burdened with student loans may delay or forego major life decisions, such as starting a business or pursuing advanced degrees, which can impede innovation and entrepreneurial activities. Moreover, student loan debt exacerbates social and economic inequalities. Those from disadvantaged backgrounds may face additional challenges in accessing higher education due to financial constraints, widening the opportunity gap. The burden of debt can also perpetuate intergenerational poverty, as individuals struggle to accumulate wealth and provide for future generations.

Public opinion on student loan debt is multifaceted and varies among individuals. However, there are some common themes that emerge. Many people acknowledge the growing concern surrounding student loan debt and the challenges it poses for borrowers. There is a general recognition that the rising cost of education and the increasing reliance on loans have created a significant burden for students and graduates. Public opinion is often divided on the responsibility of borrowers versus the role of educational institutions and the government. Some argue that borrowers should take personal responsibility for their loans, while others believe that the education system and policymakers should be held accountable for the affordability and accessibility of higher education. There is growing support for measures aimed at addressing student loan debt, such as loan forgiveness programs, income-based repayment plans, and efforts to lower interest rates. Many individuals believe that these initiatives can provide relief to borrowers and alleviate the financial stress associated with student loans.

1. As of 2021, the total student loan debt in the United States exceeds $1.7 trillion, making it the second-largest consumer debt category after mortgages. 2. Approximately 45 million Americans carry student loan debt, with an average debt per borrower of around $38,000. 3. The average monthly student loan payment for borrowers aged 20 to 30 is $393, which can significantly impact their financial stability and ability to save or invest. 4. Student loan debt is not only prevalent among recent graduates. Around 14% of borrowers are over the age of 50, often carrying debt from their own education or supporting their children's education. 5. Student loan default rates remain a concern. As of 2021, the federal student loan default rate was around 9%, indicating the financial challenges faced by some borrowers. 6. High levels of student loan debt can hinder homeownership rates. Studies suggest that the burden of student loans can delay or deter individuals from purchasing homes, impacting the housing market. 7. Certain professions, such as doctors and lawyers, often accumulate substantial student loan debt due to the extended education required for their careers.

The topic of student loan debt is of paramount importance as it addresses a pressing financial and societal issue that affects millions of individuals in the United States. Writing an essay on student loan debt allows us to delve into the multifaceted consequences it poses on borrowers and the broader economy. The staggering amount of outstanding debt, coupled with rising tuition costs, presents a significant barrier to accessing higher education and achieving economic mobility. Furthermore, the burden of student loan debt impacts borrowers' financial well-being, hindering their ability to save, invest, and contribute to the economy. Exploring the public's opinion, representation in media, and potential policy solutions can provide valuable insights into the urgency of addressing this crisis. By discussing student loan debt, we foster a deeper understanding of the challenges faced by borrowers and encourage dialogues that may lead to effective measures for easing this financial strain and supporting the pursuit of education.

1. Akers, B., & Chingos, M. M. (2014). Is a student loan crisis on the horizon? The Brookings Institution. https://www.brookings.edu/research/is-a-student-loan-crisis-on-the-horizon/ 2. Baum, S., & O'Malley, M. (2003). College on credit: How borrowers perceive their education debt. The College Board. https://files.eric.ed.gov/fulltext/ED494509.pdf 3. Dynarski, S. M. (2014). Building the stock of college-educated labor. Journal of Labor Economics, 32(1), 1-26. https://doi.org/10.1086/674012 4. Houle, J. N. (2014). Disparities in debt: Parents' socioeconomic resources and young adult student loan debt. Sociology of Education, 87(1), 53-69. https://doi.org/10.1177/0038040713514014 5. Jackson, K. M. (2018). The impact of student loan debt on job satisfaction outcomes. Journal of Student Financial Aid, 48(1), 29-52. https://doi.org/10.4148/2572-456X.1018 6. Litten, L. H., & Ackerman, D. B. (2019). A comprehensive approach to student loan debt counseling. Journal of Financial Counseling and Planning, 30(1), 43-57. https://doi.org/10.1891/1052-3073.30.1.43 7. Looney, A., & Yannelis, C. (2015). A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising loan defaults. Brookings Papers on Economic Activity, 2015(1), 1-89. https://doi.org/10.1353/eca.2015.0001 8. Lusardi, A., Schneider, D. J., & Tufano, P. (2011). Financially fragile households: Evidence and implications. Brookings Papers on Economic Activity, 2011(2), 83-134. https://doi.org/10.1353/eca.2011.0016 9. Scott-Clayton, J. (2019). The looming student loan default crisis is worse than we thought. Brookings Institution. https://www.brookings.edu/research/the-looming-student-loan-default-crisis-is-worse-than-we-thought/ 10. Zafar, B. (2013). Borrowing constraints and the returns to schooling. Annual Review of Economics, 5(1), 347-365. https://doi.org/10.1146/annurev-economics-072412-133425

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Essay Samples on Student Loan Debt

Navigating the student debt crisis.

The student debt crisis in modern society is a pressing issue that has far-reaching consequences for individuals, families, and the broader economy. This essay delves into the complexities of the student debt crisis, examining its origins, the socio-economic implications it poses, the role of higher...

• Student Loan Debt

Why Student Loans Should be Forgiven: A Path to Economic Relief and Opportunity

The burden of student loans has become a pressing issue for countless individuals pursuing higher education. As tuition costs rise and the job market becomes increasingly competitive, many graduates find themselves weighed down by student debt. In this essay, we will explore the reasons why...

• Student Loans

Student Loan Debt: Looking for Ways to Manage Student Loans

Student loans are a pain for everyone involved. Many students are burdened with the weight of repayment, with their loans attractive large interests. Lenders are forced to find ways to recoup their monies, and are forced to shoulder the risk of bad loans on their...

Student Loan Debt Forgiveness as a Progressive or Conservative Concept

Introduction and Background The student debt crisis has never been more pertinent than at this moment. Student loans, currently at a whopping $1.6 trillion, have surpassed credit card and auto loans to be the largest source of household debt after mortgages (Walker, 2019). This level...

Reasoning Why College Should Not Be Free

A parent is their child’s first teacher and should remain their best teacher throughout their life. Parents only want the best for their children and help build their lives. From the first walk, the first failed test, the first time driving the car, to the...

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Why College Should Be Free: Student Debt Crisis

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Current Student Loan System in the US

Currently, about 18% of American adults are still repaying nearly $ 1.6 trillion in student loans. In the past ten years, the total student debt in the United States has increased by 107%. These figures reflect a series of problems in the current debt system...

Debt As A Sign That College Is Not For Everyone

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• College Education

Understanding Why College Is A Worth It

In 2019, the cost of college and college related debt are at an all-time high. Most people are willingly to stick to a regular nine to five job instead of going to college to actually get a degree. There are several reasons why they would...

Impact Of Student Loans On Student's Life And The Financial Value Of A Degree

Erin Velez, Melissa Cominole & Alexander Bentz (2019) Debt burden after college: the effect of student loan debt on graduates’ employment, additional schooling, family formation, and home ownership Articles core question- How does debt affect students' lives after earning their bachelors’ degree Research method Longitudinal...

• College Students
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Student Loan Debt in 2020 is Now to Much

The democratic candidates for the 2020 presidential election have raised the issue of a student debt crisis that is striking young adults seeking higher education. Senator Warren and Senator Sanders are among these candidates who have brought the student debt issue that Americans hold to...

Here’s Your Crisis: Student Loan Debt Isn’t a Myth

These days, it is common knowledge that the university is luxurious. Most who attend college should take out student loans to even have enough money it. Although some agree with the scholar loan debt disaster is solely fictional, the pupil loan disaster needs to no...

Outstanding Student Loan Debt Will Likely Exceed $1 trillion - Student Debt Crisis

Multiple factors contribute to student debt. The growing problem of student debt has become more prominent and inspired many documentaries to investigate the cause and effect. One factor is the rate of the loan. Other factors include the emerging guidelines develops by the government. There...

Addressing the Student Loan Debt Crisis: An Analysis of its Impact on the Economy

When delving into the student loan debt crisis, one discovers that the total student loan debt in the United States amounts to a staggering $1.52 trillion. The average student borrower carries a debt of $31,172, and the duration to repay these loans can extend from...

The Effect of Student Loans on Post-Graduates

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...

• Bachelor's Degree

Benefits of Student Loans and Debt for Colleges and Students

In today's society, it is almost impossible to successfully achieve an education without some type of aid or student loans. Student loan debt is increasing, due to the total cost of universities increasing their tuition fees. Once students start to graduate, they have what is...

The Worth of Having Student Loans for a Better Job

Benjamin Franklin said, “An investment in knowledge pays the best interest.” Learning is one of the most powerful tools we have in our belt and we can definitely utilize schooling to help further us in our lives. As it can further our careers, it can...

• Cost of Education

The Abnormal Financial Load – A Problem Of College Education

A college education is not equitable something students can get in four forever; instead, it is also a quality of courage! Many Americans students are solicitation themselves, "Is pursuing a college position become the side?" College guardianship has almost sextupled since 1985, with the total...

Best topics on Student Loan Debt

1. Navigating the Student Debt Crisis

2. Why Student Loans Should be Forgiven: A Path to Economic Relief and Opportunity

3. Student Loan Debt: Looking for Ways to Manage Student Loans

4. Student Loan Debt Forgiveness as a Progressive or Conservative Concept

5. Reasoning Why College Should Not Be Free

6. Why College Should Be Free: Student Debt Crisis

7. Current Student Loan System in the US

8. Debt As A Sign That College Is Not For Everyone

9. Understanding Why College Is A Worth It

10. Impact Of Student Loans On Student’s Life And The Financial Value Of A Degree

11. Student Loan Debt in 2020 is Now to Much

12. Here’s Your Crisis: Student Loan Debt Isn’t a Myth

13. Outstanding Student Loan Debt Will Likely Exceed $1 trillion – Student Debt Crisis

14. Addressing the Student Loan Debt Crisis: An Analysis of its Impact on the Economy

15. The Effect of Student Loans on Post-Graduates

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Ethan bueno de mesquita appointed dean of the harris school of public policy, a smarter way to solve the student debt problem, blanket loan forgiveness less effective than helping those who need it most, research suggests.

Editor’s Note: This piece was written by Constantine Yannelis, an assistant professor of finance at the University of Chicago Booth School of Business, and shared by Chicago Booth Review . The essay is based on testimony Yannelis submitted to the U.S. Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Economic Policy in April 2021.

Education is the single highest-return investment most Americans will make, so getting our system of higher-education finance right is fundamentally important for U.S. households and the economy.

A key point in the student-loan debate is that the outcomes of borrowers vary widely. Undeniably, a significant number of borrowers are struggling, and are sympathetic candidates for some kind of relief. Student-loan balances have surged over the past decades. According to the New York Fed, last year student loans had the highest delinquency rate of any form of household debt.

Most student borrowers end up as higher earners who do not have difficulties repaying their loans. A college education is, in the vast majority of cases in America, a ticket to success and a high-paying job. Of those who struggle to repay their loans, a large portion attended a relatively small number of institutions—predominantly for-profit colleges.

The core of the problem in the student-loan market lies in a misalignment of incentives for students, schools, and the government. This misalignment comes from the fact that borrowers use government loans to pay tuition to schools. If borrowers end up getting poor jobs, and they default on their loans, schools are not on the hook—taxpayers pay the costs. How do we address this incentive problem? There are many options, but one of the most commonly proposed solutions is universal loan forgiveness.

Various forms of blanket student-loan cancellation have been suggested, but all are extremely regressive, helping higher-income borrowers more than lower-income ones. This is primarily because people who go to college tend to earn more than those who do not go to college, and people who spend more on their college education—such as those who attend medical and law schools—tend to earn more than those who spend less on their college education, such as dropouts or associate’s degree holders.

My own research with Sylvain Catherine of the University of Pennsylvania demonstrates that most of the benefits of a universal-loan-cancellation policy in the United States would accrue to high-income individuals, those in the top 20 percent of the earnings distribution, who would receive six to eight times as much debt relief as individuals in the bottom 20 percent of the earnings distribution. These basic patterns are true for capped forgiveness policies that limit forgiveness up to $10,000 or $50,000 as well.

Another problem with capped student-loan forgiveness is that many struggling borrowers will still face difficulties. A small number of borrowers have large balances and low incomes. Policies forgiving $10,000 or $50,000 in debt will leave their significant problems unaddressed.

While income phaseouts—policies that limit or cut off relief for people above a certain income threshold—make forgiveness less regressive, they are blunt instruments and lead to many individuals who earn large amounts over their lives, such as medical residents and judicial clerks, receiving substantial loan forgiveness.

A fact that is often missed in the policy debate is that we already have a progressive student-loan forgiveness program, and that is income-driven repayment.

If policy makers want to make sure that funds get into the hands of borrowers at the bottom of the income distribution in a progressive way, blanket student-loan forgiveness does not accomplish this goal. Rather, the policy primarily benefits high earners.

While I am convinced from my own research that student-loan forgiveness is regressive, this is also the consensus of economists. The Initiative on Global Markets at Chicago Booth asked a panel of prominent economists to weigh in on this statement: “Having the government issue additional debt to pay off current outstanding loans would be net regressive.” The panel included economists from leading institutions from both the left and the right. The results of the survey were telling. Not a single economist disagreed with the idea that student-loan forgiveness is regressive. This is because the facts are clear—to borrow a phrase commonly used, “The science is settled”—student-loan forgiveness is a regressive policy that mostly benefits upper-income and upper-middle-class individuals.

Another facet of this policy issue is the effect of student-loan forgiveness on racial inequality. One of the most distressing failures of the federal loan program is the high default rates and significant loan burdens on Black borrowers. And student debt has been implicated as a contributor to the Black-white wealth gap. However, the data show that student debt is not a primary driver of the wealth gap, and student-loan forgiveness would make little progress closing the gap but at great expense. The average wealth of a white family is $171,000, while the average wealth of a Black family is $17,150. The racial wealth gap is thus approximately $153,850. According to our paper, which uses data from the Survey of Consumer Finances, and not taking into account the present value of the loan, the average white family holds $6,157 in student debt, while the average Black family holds $10,630. These numbers are unconditional on holding any student debt.

Thus, if all student loans were forgiven, the racial wealth gap would shrink from $153,850 to $149,377. The loan-cancellation policy would cost about $1.7 trillion and only shrink the racial wealth gap by about 3 percent. Surely there are much more effective ways to invest $1.7 trillion if the goal of policy makers is to close the racial wealth gap. For example, targeted, means-tested social-insurance programs are far more likely to benefit Black Americans relative to student-loan forgiveness. For most American families, their largest asset is their home, so increasing property values and homeownership among Black Americans would also likely do much more to close the racial wealth gap. Still, the racial income gap is the primary driver of the wealth gap; wealth is ultimately driven by earnings and workers’ skills—what economists call human capital. In sum, forgiving student-loan debt is a costly way to close a very small portion of the Black-white wealth gap.

How can we provide relief to borrowers who need it, while avoiding making large payments to well-off individuals? There are a number of policy options for legislators to consider. One is to bring back bankruptcy protection for student-loan borrowers.

Another option is expanding the use of income-driven repayment. A fact that is often missed in the policy debate is that we already have a progressive student-loan forgiveness program, and that is income-driven repayment (IDR). IDR plans link payments to income: borrowers typically pay 10–15 percent of their income above 150 percent of the federal poverty line. Depending on the plan, after 20 or 25 years, remaining balances are forgiven. Thus, if borrowers earn below 150 percent of the poverty line, as low-income individuals, they never pay anything, and the debt is forgiven. If borrowers earn low amounts above 150 percent of the poverty line, they make some payments and receive partial forgiveness. If borrowers earn a high income, they fully repay their loan. Put simply, higher-income people pay more and lower-income people pay less. IDR is thus a progressive policy.

IDR plans provide relief to struggling borrowers who face adverse life events or are otherwise unable to earn high incomes. There have been problems with the implementation of IDR plans in the U.S., but these are fixable, including through recent legislation. Many countries such as the United Kingdom and Australia successfully operate IDR programs that are administered through their respective tax authorities.

Beyond providing relief to borrowers, which is important, we could do more to fix technical problems and incentives. We could give servicers more tools to contact borrowers and inform them of repayment options such as IDR, and we could also incentivize servicers to sign more people up for an IDR plan. But while we may be able to make some technical fixes, servicers are not the root of the problem in the student-loan market: a small number of schools and programs account for a large portion of adverse outcomes.

To fix this, policy makers can also directly align the incentives for schools and borrowers. For example, Brazil, which has had similar problems with its student-loan program, recently gave schools skin in the game by requiring them to pay a fee based on dropout and default rates. This helped align the incentives of the schools and the student borrowers. Making revenues go directly to schools from IDR plans, or implementing income-share agreements in which individuals pay an uncapped portion of their income, could also help align the incentives of schools, students, and taxpayers.

Federal student loans are an important part of college financing and intergenerational mobility. The root of our student-loan crisis is a misalignment of incentives. Since the problem has been so slow moving and continuous, I like the analogy of a frog slowly boiling in a pot of water over a flame. Policies such as student-debt cancellation are not extinguishing the flame—they aren’t fixing the incentive problem. All they do is move the frog into a slightly cooler pot of water. And if we don’t fix the core of the problem, even if we forgive $50,000 of debt for current borrowers, balances will continue to grow, and we will be facing a similar crisis in 10 or 20 years.

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Home > JSFA > Vol. 45 > Iss. 3 (2015)

Journal of Student Financial Aid

Nicholas W. Hillman , University of Wisconsin - Madison Follow

Borrowing and Repaying Student Loans

Short Title

This essay synthesizes the most recent and rigorous research on student loan debt. It focuses on basic questions about who borrows, how much, and whether debt affects behaviors. Answers to these questions are necessary for informing federal student loan policymaking, yet the research findings are surprisingly mixed because of poor data quality, research design challenges, and the growing heterogeneity of borrowers. This ambiguity makes federal policymaking difficult when questions about the benefits and burdens of student loan debt are left unanswered. By synthesizing the current research, this essay helps answer some of these questions while calling attention to others.

Recommended Citation

Hillman, Nicholas W. (2015) "Borrowing and Repaying Student Loans," Journal of Student Financial Aid : Vol. 45 : Iss. 3 , Article 5. DOI: https://doi.org/10.55504/0884-9153.1588 Available at: https://ir.library.louisville.edu/jsfa/vol45/iss3/5

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Student Loans and Financial Stress Essay

One of the remarkable peculiarities of modern American society is the understanding of the value of higher education. Americans now strive for obtaining a degree that is supposed to ensure better employment prospects. Student loans have become an opportunity for thousands of people, but the cost of the chance to succeed in life is becoming rather unbearable for many. According to Bloomberg (2018), federal student loans reached $1.4 trillion in 2018, which is the second-largest debt segment (after mortgage). It is noteworthy that this kind of debt is a more serious burden for underprivileged groups due to their families’ financial background as well as inequity in the labor market (Addo, Houle, & Simon, 2016). It appears that student loans that are aimed at providing wider access to all are contributing to the inequality existing in the USA. Governmental agencies can and should address this problem, but their effort should go hand in hand with personal responsibility and more intense involvement of educators.

It should be noted that student loans did not emerge in the 21 st century. This opportunity was available as far back as the 1960s (Popp Berman & Stivers, 2016). However, the amount of borrowed money was significantly smaller as students tended to work (especially in the summertime) and could cover a larger part of their academic expenses. Another factor that led to an unprecedented increase in student loans was the rising tuition costs (Bloomberg, 2018). The funding provided by state and local governments has been decreasing exponentially, which forced educational establishments to raise their fees. For instance, the governmental funding of postsecondary education was almost 60% in the late 1970s while it was not even 40% in 2012 (Britt, Ammerman, Barrett, & Jones, 2017). The government also used to play a more significant role in regulating financial aspects related to postsecondary education.

At present, students often face numerous challenges including the need to pay considerable sums, low access to detailed information concerning their rights and available opportunities, as well as inappropriate methods used by various collection agencies. Of course, it is a beautiful dream to ensure that every American can receive higher education, but it is hardly attainable. Therefore, the cost of a degree should be divided among the primary stakeholders. The government should increase the funding of postsecondary education and try to provide wider access to educational services (Ionescu & Simpson, 2016). Educational establishments can also try to reduce or, at least, keep their fees unchanged, which can be achieved with the help of cooperation with non-governmental organizations, various institutions, state and local authorities, and private-owned businesses.

In conclusion, it is necessary to state that the government should start playing a more active role in the process and regulate the financial aspect related to higher education. However, students should also be more responsible and ensure they can pay the loans they lend. Young people should also be hard-working and make sure they complete the courses they enroll. Finally, students should try to find opportunities to pay their debts by working during the summer. Educational establishments can and should assist students in their endeavors by providing detailed information regarding all the aspects and opportunities, as well as hazards, associated with higher education and student loans. It is critical to make sure that all stakeholders contribute to the development of the educational system that enhances social equality and helps the nation to prosper.

Addo, F. R., Houle, J. N., & Simon, D. (2016). Young, black, and (still) in the red: Parental wealth, race, and student loan debt. Race and Social Problems, 8 (1), 64-76. Web.

Bloomberg. (2018). America’s student loan debt crisis is about to get much worse. Fortune . Web.

Britt, S. L., Ammerman, D. A., Barrett, S. F., & Jones, S. (2017). Student loans, financial stress, and college student retention. Journal of Student Financial Aid, 47 (1), 25-37.

Ionescu, F., & Simpson, N. (2016). Default risk and private student loans: Implications for higher education policies. Journal of Economic Dynamics and Control, 64 , 119-147. Web.

Popp Berman, E., & Stivers, A. (2016). Student loans as a pressure on U.S. higher education. Research in the Sociology of Organizations, 46 , 129-160.

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Biden seeks student debt relief for millions

Sequoia Carrillo

U.S. Education Secretary Miguel Cardona participates in an event at Dartmouth College in January. Steven Senne/AP hide caption

U.S. Education Secretary Miguel Cardona participates in an event at Dartmouth College in January.

The Biden administration unveiled a new set of plans on Monday that would eliminate student debt for millions of Americans. The administration says that, if fully implemented, it would bring the number of borrowers who've seen some or all of their debt forgiven during the president's term to more than 30 million.

The new plan, aiming to supplant an earlier version that was rejected by the U.S. Supreme Court in June , offers targeted relief to specific groups of borrowers, notably those who've carried debt for many years, and those struggling to make payments. And many borrowers, regardless of income, could see relief from high interest balances.

U.S. Education Secretary Miguel Cardona said the new proposals will fulfill a promise the president made while a candidate in 2020. The relief offered, he added, will mean "breathing room" for many borrowers. "It means freedom from feeling like your student loan bills compete with basic needs like grocery or health care."

The Student Loan Restart

Education dept. fast-tracks forgiveness for borrowers with smaller student loans.

The announcement spelled out efforts aimed at four groups of borrowers: those who owe more money than they did at the start of their repayment, borrowers who started paying more than 20 years ago, those already eligible for existing loan forgiveness or discharge programs but haven't yet applied, and borrowers facing economic hardship.

Addressing "runaway interest"

More than 25 million borrowers, the administration said, owe more in student loans now than they took out originally, due to what Cardona called "runaway interest." The first element of the new plan would allow any borrower, regardless of their income, to cancel up to $20,000 in interest.

In addition, low and middle-income borrowers who are enrolled in an income-driven repayment plan would have all of their interest forgiven. This group of borrowers includes single borrowers earning $120,000 or less a year, and married borrowers who make $240,000.

If the plans go through as proposed, there would be no application necessary.

The administration estimates that this proposal would forgive some interest balances for 25 million borrowers, with 23 million receiving full forgiveness on their interest. Currently, about 43 million Americans have some form of student loan debt.

Automatic discharge for eligible borrowers

Since Biden took office, several student loan programs have been revamped or re-negotiated to help ease borrowers' debt, though many still require borrowers to apply. (The programs can be dense, but NPR has previously reported on these programs and how to navigate them: including the SAVE program , public service loan forgiveness, and closed schools discharge .)

As the administration noted in its announcement, not every borrower who qualifies for these programs has applied, with more than 2 million eligible borrowers who have not done so.

Under the proposed plan, qualifying borrowers would no longer have to enroll to receive forgiveness. The Education Department plans to use use data it already has to identify those borrowers, and automatically credit their accounts.

Relief for long-time borrowers and those experiencing hardship

The new proposals would also help long-term borrowers. According to the Education Department, more than 2.5 million borrowers have carried student loan debt for more than two decades. Under the plan, borrowers carrying undergraduate debt would qualify for forgiveness if they started repayment on or before July 1, 2005. Borrowers with graduate school debt would qualify if they started repayment on or before the same date in 2000.

In keeping with the theme of these announcements, borrowers would not need to be enrolled in any plan to qualify. The relief would be automatic.

A separate component would help those experiencing economic hardship. Some of this relief would be also happen automatically – for example, if a borrower is at a high risk of defaulting on their student loans. Other relief would require an application. The administration says borrowers who are struggling with medical debt or child care could apply for this program, if it is implemented.

A new legal foothold for sweeping debt relief

The Biden administration has made multiple attempts at discharging student loan debt since taking office. Perhaps most notably in 2022: the president announced widespread relief of up to $20,000 for qualifying borrowers. Millions of borrowers filled out the form to opt-in to the program, but the project was put on hold due to legal challenges. The Supreme Court struck down that plan in June of 2023.

Biden cancels nearly $6 billion in student debt for public service workers

This new approach has been in the works for some time, as the Education Department has been undergoing what's called "negotiated rule-making" to develop a new avenue for debt relief since the original plan was overturned in June. They've been hearing from stakeholders, advocates, and critics in advance of this announcement.

It's expected the new proposals will take some time before eligible borrowers can begin to see their debt eliminated. The Education Department must gather public comment on the proposal before issuing a final version of its plan.

The plan will likely face legal challenges as well, though though the rulemaking process may put this effort on stronger legal ground than the first debt-relief plan.

Some student-loan borrowers have just 1 month left to get closer to debt cancellation — and they need to take action

• Some student-loan borrowers have one month left to benefit from one-time account adjustments.
• Borrowers who do not have qualifying loans need to consolidate by April 30.
• The Education Department expects to complete account adjustments in July.

Some student-loan borrowers have just one month to get closer to debt relief.

President Joe Biden's Education Department is nearing the end of its one-time account adjustment for borrowers on income-driven repayment plans and Public Service Loan Forgiveness.

First implemented last summer, the adjustment allowed the department to evaluate borrowers' accounts every other month to determine which borrowers qualified for debt relief but had yet to receive it. The department said it expects adjustments to be completed by July 1 — and while it happens automatically for some borrowers, others will need to take action soon to benefit from the temporary provision.

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To benefit from the adjustment, borrowers must be in the federal direct loan program or the Federal Family Education Loan program with government-held loans. The department recommends that For those without qualifying loans apply to consolidate into one of the programs by April 30.

"In general, it takes at least 60 days to process a direct consolidation loan application and to disburse the new loan," the department's guidance said.

The Consumer Financial Protection Bureau also released an advisory in early March reminding borrowers of the consolidation deadline. It said that borrowers with the following federal loans will need to consolidate to benefit from the adjustment:

Commercially held FFEL loans

Parent PLUS loans

Perkins loans

Health Education Assistance Loan Program loans

To consolidate, borrowers can go to studentaid.gov/loan-consolidation .

In August, the Education Department wiped out $39 billion in student debt for 800,000 borrowers — the first group to see relief through the account adjustment. Since then, the department has continued to enact targeted relief for borrowers due to the reform, most recently forgiving $5 billion in student loans for 74,000 borrowers through the adjustment.

At the same time, the Education Department is rolling out a range of efforts intended to ease repayment for borrowers. Through its new SAVE income-driven repayment plan, 153,000 borrowers were recently approved for $1.2 billion in relief — a result of a SAVE provision that allows borrowers who originally borrowed $12,000 or less to get relief with as few as 10 years of qualifying payments.

However, the future of SAVE is uncertain, given a new lawsuit from 11 GOP state attorneys general to block the program and prevent relief from reaching borrowers. An Education Department official told Business Insider it "won't stop fighting to provide support and relief to borrowers across the country — no matter how many times Republican elected officials try to stop us."

Watch: Why student loans aren't canceled, and what Biden's going to do about it

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With the average cost of college tuition surpassing $11,000 per year at public universities, it’s no surprise that the majority of college graduates leave school owing money. In fact, students and parents borrowed approximately $98 billion in student loans to pay for college in 2023.

If your student loan balance feels overwhelming, you may be looking for debt relief options. Student loans have more limitations than other forms of debt, but there are ways to make your payments more manageable or even get help to repay your loans. 

Why are student loans so different from other forms of debt? 

Student loans are a unique form of debt. 

“Student loans can feel like a double whammy for recent graduates,” said Todd Christensen, an education manager with MoneyFit , a non-profit credit counseling agency. “First, they’re often saddled with high monthly payments that can be tough to swing on a starting salary. Second, they can feel overwhelmed when trying to navigate the different repayment options available through their lender.” 

If you take out loans and struggle to pay them back, defaulting on your loans can have significant consequences. In the case of federal loans, your loan servicer can 

garnish your wages or Social Security benefits and even seize your tax refund without a court order.  

And while borrowers may consider bankruptcy, it may not be the solution you’d expect. 

“Student loan debt in the U.S. is notoriously difficult to discharge in bankruptcy,” said Cliff Andrews, CEO of the Consumer Debt Relief Initiative , a debt resolution industry association. “Borrowers must demonstrate ‘undue hardship’ to have these loans discharged, a much higher bar than for most other types of debt, making student loans a more persistent financial burden for those who struggle to repay them.”

Although it’s not impossible to get your loans discharged in bankruptcy, it’s rare, so escaping your debt is challenging. 

10 Debt relief options for student loan borrowers

Depending on the type of loans you have, you could take advantage of one or more of the following debt relief options for your student loans: 

1. Contact your loan servicer to discuss payment options

As soon as you realize your student loan payments are too high for you to afford, contact your loan servicer — the company handling your loans. If you reach out before missing a payment, you’ll likely have more options. 

If you have federal student loans, you may be eligible for an income-driven repayment (IDR) plan . There are currently four IDR plans, but all of them base your payments on a percentage of your discretionary income. Some borrowers even qualify for $0 payments, so they can pay nothing toward their loans without becoming delinquent on their debt. It’s free to enroll in an IDR plan, and you can use the Federal Student Loan Payment Simulator tool to find out what your payments would be under each of the payment plans. 

Private student loans aren’t eligible for IDR plans, but some private lenders have their own alternative payment plans. Depending on the lender, you may be able to make reduced payments for a limited period, giving you time to improve your finances. 

2. Pursue loan forgiveness 

Loan forgiveness is possible, but it’s limited to federal student loan borrowers. There are three main federal loan forgiveness programs: 

• IDR Forgiveness: If you enroll in an IDR plan, keep up with your payments and still have a balance at the end of the plan’s repayment term, the government will forgive your remaining balance. Depending on your balance and the IDR plan, you could qualify for forgiveness in 10 to 25 years. 
• Public Service Loan Forgiveness (PSLF): PSLF is a program for federal loan borrowers who work for non-profit organizations or government offices. You can qualify for forgiveness of 100% of your remaining loan balance if you work for an eligible employer for 10 years and make 120 qualifying monthly payments. Under PSLF rules, payments made under an IDR plan count, so you can qualify for loan forgiveness even if you make reduced payments through an IDR plan. 
• Teacher Loan Forgiveness: Teacher Loan Forgiveness provides up to $17,500 in loan forgiveness to elementary or secondary school teachers with federal student loans who teach in low-income schools for at least five full and consecutive years. 

3. Explore loan cancellation options

While loan forgiveness is earned through your employment or payment status, loan cancellation is available due to circumstances outside your control. Common loan cancellation options include: 

• Total and permanent disability: If you become totally and permanently disabled and are unable to work, you may qualify for a discharge of your loans. Total and permanent disability discharge is a federal program, but some private lenders offer loan discharge for borrowers with disabilities too. 
• Borrower defense to repayment: If you attended a school who was found to be violating federal or state laws or selected a college based on misleading information, you may be eligible for loan discharge through borrower defense to repayment. Only available to federal loan borrowers, you can view the list of colleges involved in borrower defense to repayment discharges on the Federal Student Aid website. 

4. Apply for forbearance or deferment

If you have a temporary financial hardship, such as a job loss or medical illness, you may be eligible for forbearance or deferment. These programs allow you to temporarily pause your payments. 

Federal forbearance programs tend to be longer in duration, and there are more qualifying circumstances. However, some private lenders also operate their own forbearance programs and allow you to postpone your payments. 

5. Sign up for debt counseling

If you have student loans and need help understanding your repayment options, some

non-profit credit counseling agencies have programs specifically designed for student loan borrowers. 

Bruce McClary, senior vice president of membership and media relations with the National Foundation for Credit Counseling ( NFCC ), said debt counselors can help borrowers in several ways. 

“NFCC Certified Student Loan Counselors can assess your financial situation, including your income, expenses, and all of your debt (including student loans),” he said. “They’ll help you create a realistic budget and develop a personalized repayment strategy that considers all your loans, including federal options like income-driven repayment plans and potential consolidation strategies.”

Non-profit credit counseling services are often free or based on a sliding scale. And if you’re also managing other forms of debt, a credit counselor can help with credit card balances, medical bills and more. 

“It’s important to note that many struggling student loan borrowers are also facing challenges repaying other debt, such as credit card balances,” McClary said. “A Debt Management Plan can work in tandem with student loan counseling to provide a more comprehensive solution.”

Some of the best debt relief companies may also offer support for private student loan debt.

6. Get loan repayment assistance from your state

Depending on your location and profession, you may qualify for help with your loans from the state. Some states have special loan repayment assistance programs to encourage workers in high-need areas, such as healthcare or education. For example: 

• Georgia Board of Health Care Workforce Loan Repayment Program : Healthcare professionals like doctors and dentists can get up to $25,000 per year in loan repayment assistance. 
• New Jersey STEM Loan Redemption Program : Workers in science, technology, engineering and mathematics workers in New Jersey who live and work in the state can qualify up to $2,000 per year of loan repayment assistance. 
• Florida Legal Aid Loan Repayment Assistance : If you’re a Florida attorney working for a legal aid organization, you may be eligible for up to $5,000 in loan repayment assistance. 

7. Ask your employer for help

Some employers will help their employees with their loans by contributing to their student loan repayment. According to the Society for Human Resource Management , 8% of employers offer student loan reimbursement benefits. 

If you qualify for student loan repayment benefits, the employer will match up to a monthly maximum toward your student loans. For example, if your employer matches up to $100 per month, you could get $1,200 per year toward your loans.                     

8. Settle your student loan debt

If you have student loans and other forms of debt, debt settlement can be appealing. However, debt settlement with student loans is difficult.

With federal loans, successful debt settlement is exceedingly rare, and you’ll need to pay about 85% to 95% of your balance plus interest and fees to settle. You’ll have to handle negotiations on your own; the U.S. Department of Education doesn’t participate in debt settlement programs. 

As a result, debt settlement companies won’t work with federal loans, but some companies may be willing to help you negotiate a settlement for private student loans. 

“Whether a debt settlement company will assist in settling a private student loan will depend on the company’s experience with the creditor,” said Andrews.

Depending on your situation, typical settlements range from 40% to 70% (before accounting for the debt relief company’s fees). 

“While debt settlement is not right for everyone, we have witnessed the power of financial reset that debt settlement companies provide,” Andrews said. 

9. Refinance your student loans

For borrowers with high-interest loans, student loan refinancing is one way to save money or accelerate repayment. By refinancing, you take out a new loan and use it to pay off your existing federal or private loans. If you have good credit — or a family member with good credit who is willing to co-sign your application — you could qualify for a loan with a lower interest rate than you have now, lowering your monthly payment and total repayment cost. 

However, there are downsides to refinancing, particularly if you have federal loans. Once you refinance federal debt, you lose access to federal loan benefits like IDR plans and loan forgiveness, so it’s usually best to only refinance your private loans. 

10. Consult with a bankruptcy attorney

If your debt is so overwhelming that you see no way out, bankruptcy could be a solution. Discharging student loans in bankruptcy is rare, but it is possible to have federal and private loans discharged. 

Bankruptcy is a serious step with long-lasting consequences to your credit, so it should only be explored once you’ve exhausted other debt relief options. To find out whether bankruptcy makes sense, contact a non-profit credit counselor or a bankruptcy attorney.

Student loan debt relief FAQs

Can student loan debt be settled .

Whether your student loans can be settled depends on the loans you have. Debt settlement companies typically exclude federal student loans, but some companies will work with private student loans. 

What debt relief options are available for student loans? 

Depending on your situation, you may be eligible for alternative payment plans, loan repayment assistance or even loan forgiveness based on your employment. 

What happens if I can’t afford my student loan payments?

If you fall behind on your payments, the consequences can be severe. With federal loans, loan servicers can garnish your wages without a court order, and they can even take your tax refund.

EDITORIAL DISCLOSURE : The advice, opinions, or rankings contained in this article are solely those of the Fortune Recommends ™ editorial team. This content has not been reviewed or endorsed by any of our affiliate partners or other third parties.

Biden promotes ‘life-changing’ student loan relief in Wisconsin as he rallies younger voters

MADISON, Wis. (AP) — President  Joe Biden  said Monday that more than 30 million borrowers would see “life-changing” relief from his  new plan to ease their student loan debt burdens , a fresh attempt by the Democratic president to follow through on a campaign pledge that could buoy his standing with younger voters.

He detailed the initiative, which has been in the works for months, during a trip to Wisconsin, one of a handful of battleground states that could decide the outcome of Biden’s likely November rematch with Donald Trump, the presumptive Republican nominee.

Biden said he wanted to “give everybody a fair shot” and the “freedom to chase their dreams” as he lamented the rising cost of higher education.

“Even when they work hard and pay their student loans, their debt increases and not diminishes,” he said. “Too many people feel the strain and stress, wondering if they can get married, have their first child, start a family, because even if they get by, they still have this crushing, crushing debt.”

Biden’s trip, which included a stop at a Chicago fundraiser on the way back to Washington, comes a week after  primary voting in Wisconsin  highlighted political weaknesses for him as he prepares for the general election.

More than 48,000 Democratic voters chose “uninstructed” instead of Biden, more than double his narrow margin of victory in the state in 2020.

Trump also saw a significant number of defections during the state’s primary, with nearly 119,000 Republicans voting for someone other than him.

But Biden’s results, which echoed similar protest votes in states like Michigan and Minnesota, have rattled Democrats who are eager to  solidify the coalition  that catapulted him into the White House in the first place.

A critical fracture has been the Israel-Hamas war. Younger voters are more likely to disapprove of Biden’s enduring support for Israel’s military operation in Gaza, which has caused heavy casualties among Palestinian civilians.

Concerns about the war have spread throughout the Madison area, said Democratic Rep Mark Pocan, who represents the city. Pocan said he was “surprised to see the intensity on the issue” from all ages of voters, and he wanted Biden to be aware.

“I just want to make sure he knows that if we’re going to have a problem, that could be the problem in Wisconsin,” Pocan said.

Some young voters have been impatient with Biden’s attempts to wipe away student loan debt. The  Supreme Court last year foiled  his first attempt to forgive hundreds of billions of dollars in loans, a decision that Biden called a “mistake.”

Since then, the White House has pursued debt relief through other targeted initiatives, including those for public service workers and low-income borrowers. Administration officials said they have canceled $144 billion in student loans for almost 4 million Americans.

At the same time, the Department of Education has been working on a more expansive plan to replace Biden’s original effort. Monday’s announcement was an opportunity to energize young voters whose support Biden will need to defeat Trump in November.

Vice President Kamala Harris went to Pennsylvania, another battleground state, on Monday to promote debt relief in a meeting with city and school employees in Philadelphia.

“You shouldn’t have to make a decision whether you serve or be able to pay your bills,” she said.

Republicans said Biden’s plan shifts the financial burden of college tuition onto taxpayers who didn’t take out loans to attend school, and Kris Kobach, the Republican attorney general in Kansas, accused him of trying to twist the law “beyond recognition.”

The Job Creators Network, a conservative advocacy group that challenged Biden’s original plan, is considering legal action as well. The organization is backed by Bernie Marcus, a Republican donor who is also hosting a fundraiser for Trump in Atlanta on Wednesday. Trump described Biden’s debt relief initiative as an “election-enhancing money grab” two years ago.

Biden’s new plan would expand federal student loan relief to five new categories of borrowers through the Higher Education Act, which administration officials believe puts it on a stronger legal footing than the sweeping proposal that was killed by a 6-3 court majority last year.

The plan is smaller and more targeted than Biden’s original plan, which would have canceled up to $20,000 in loans for more than 40 million borrowers. The new plan would cancel some or all federal student loans for more than 30 million Americans, the White House said. The Education Department plans to issue a formal proposal in the coming months, with plans to start implementing parts of the plan as early as this fall.

The plan’s widest-reaching benefit would cancel up to $20,000 in interest for borrowers who have seen their balance grow beyond its original amount due to what Biden described as “runaway” interest. That part of the plan would forgive at least some unpaid interest for an estimated 25 million borrowers, with 23 million getting all their interest erased, according to the White House.

An additional 2 million borrowers would automatically have their loans canceled because they’re eligible but have not applied for other forgiveness programs, such as Public Service Loan Forgiveness.

Borrowers who have been repaying their undergraduate student loans for at least 20 years would be eligible to have any remaining debt canceled, along with those repaying graduate school loans for 25 years or more.

The plan would forgive debt for those who were in college programs deemed to have “low financial value.” It’s meant to help those who were in programs that ended up becoming ineligible to receive federal student aid or programs found to have cheated students.

A final category would cancel debt for borrowers facing financial hardship.

Associated Press writer Scott Bauer in Madison, Wisconsin, and Chris Megerian in Washington contributed to this report.

Copyright 2024 The Associated Press. All rights reserved.

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