1 July 2018
Causes of The Student Loans Crisis
In todays time, we can never get an object for a decent price. Everything is so expensive nowadays and it is tearing down our economy. As we analyze the causes of student loans, we find that many of these issues are due to the lack of sufficient income, borrowing money from the government, spending extra money on campus amenities, and dramatic rise in college tuition.
Financial aid is based on household income. A family with a lower income would be more likely to receive more of the financial aid benefits rather than more of a family with a wealthy income. Without financial aid, the next process in paying for college would be student loans. Student loans are a great way to help give the student a chance to attend college without the help of finical aid, but with that there are some downsides to student loans as well. According to the Federal Reserve Board of New York, there are approximately thirty-seven billion student borrowers with the burden of the amounts of student loans. Some of these loans will not ever be paid back. Futhermore, this student loans crisis is now making g it harder for student s to atom and pay for college.
Without money to pay for public universities and schools, Americans have continued to turn to borrowing money from the government and they have made it easier for the people to do so. “Between the 1980s and 2013, middle-class workers have seen their incomes barely budge, and low-wage workers have actually seen their incomes decrease, according to the Economic Policy Institute.”(Berman, par.4). Due to this, many families have not been able to pay for college straight out of their pockets. Now, what is happening is that more, and more families are not able to pay for college yet the need for a college degree is increasing everyday. If we, American families cannot pay for college, how are we supposed to get a degree? Most jobs and careers require one nowadays. Thankfully, the government has made it easier and easier for people to borrow money for college without them knowing if these people will ever be able to pay their debt back. Shelia Bair says, “Debt is not the answer; real wage growth is the answer” to Americans’ inability to afford homes or degrees (Berman, par. 6).
Nowadays, college costs way more than it ever did in the past. Tuition for public universities and schools has exploded. “The cost of schools and universities have increased 230% since the 1980s” (Borek, page 1). If college tuition is increasing and at the same time people are not receiving an increase in wages, how would people not receive student loans? This is the question everyone is asking. The more money universities disport to students, the higher the tuition will increase. It is not only public universities tuition increasing, community colleges’ tuition are on the rise as well. “Even community colleges, which should be more affordable, have increased 164 percent over the last 30 years” (Borek page 1). Out-of-state tuition is now three times as much as the residents have to pay to compensate.
Spending extra money every year on new amenities also play a part in the cause of student loans. New football stadiums, upgraded dorms, and improved recreation centers are all luxurious desires that the students would like to have. This money should be going to the students ands help them, pay their way through college, but instead the schools are fighting to compete with other campuses to make them look better and improved. Not only does the schools spend money on unnecessary needs, they are increasing the administrative pay as well. “The average college president of a public university, in fact, makes nearly four times as much as a full-time professor at HYPERLINK "http://money.cnn.com/2015/06/07/pf/college/highest-paid-public-university-presidents/"$428,000 a year, and some have had salaries exceeding $1 million”(Borek, page 1).
As a society, we are not doing any good by granting student loans they cannot pay back. The real issue of the student debt crisis is most people have not received any raises in years, the tuition for school has increased dramatically and borrowing money from the government.
Schools should “hold the line on costs” instead think of how fundraisers help students get to college. In order to change this the government needs to reduce the costs of tuition so that granting loans is affordable for students to pay back.
Berman, Jillian. “What’s Really Causing the Student Debt Crisis, According to Sheila Bair.” MarketWatch, MarketWatch, 17 Oct. 2015, HYPERLINK "http://www.marketwatch.com/story/whats-really-causing-the-student-debt-crisis-according-to-sheila-bair-2015-10-15"www.marketwatch.com/story/whats-really-causing-the-student-debt-crisis-according-to-sheila-bair-2015-10-15. Accessed June 27 2018
Borek, Samantha. “Five Reasons Why Student Debt Is Skyrocketing.” Truthout, Truthout, 4 June 2016, HYPERLINK "http://truthout.org/articles/five-reasons-why-student-debt-is-skyrocketing/"truthout.org/articles/five-reasons-why-student-debt-is-skyrocketing/. Accessed 27 June 2018
Wexler, Ellen. “Study: Increased Student Aid, Not Faculty Salaries, Drives Tuition Up.” Esports Quickly Expanding in Colleges, Inside Higher Ed, HYPERLINK "http://www.insidehighered.com/news/2016/02/09/"www.insidehighered.com/news/2016/02/09/ study-increased-student-aid-not-faculty-salaries-drives-tuition. Accessed June 29 2018