The Effects of Student Debt

The Effects of Student Debt

It is stressed in America that education is the key to success. Going to college and getting an education is supposed to make your life easier because it opens the opportunity for a great career. This career is supposed to bring in lots of money for you, but a great percentage of that money is going to back to Sallie Mae. 40 Million Americans now have student loan debt. The cost of tuition is rapidly rising every single year and has skyrocketed the Student-loan balance in the past decade. These large amounts of student debt are enabling the nation to grow. The burden of these debts holds people back from their potential in areas of business. People with these student loans cannot afford to take any more risks with their money. People are not even thinking twice about purchasing homes and cars for fear of digging themselves into a hole that they can not get out of. These raging debts coming from student loans are delaying graduates’ lives and preventing them from enjoying all aspects of life.

Students are in college working hard in order to better their lives. They have hopes to be able to buy what they want when they want. Not too long after graduation, the student loan offices start sending their bills out to these mostly unestablished graduates. These graduates are looking at this bill and start to contemplate the things that they are not going to be able to afford because of it. Many are looking into buying a house or an apartment for them to stay but many times turn the thought of it down. Some even have to go back to relying back on their parents for things which holds them back from their adulthood.

It is hard for graduates with such high student debt to get a house or car. When trying to get a loan or financing for things with higher interest, the banks and loan offices are not even going to think twice about it. Graduates are feeling that it is safe to wait until they are settled to buy a house because they know that they simply can not afford it. Alan Pyke, an economic policy editor, reports in his article, “In 2013, 27- to 30-year-olds with student loan debt were less likely to have a mortgage than their peers who don’t owe school debt for the second year in a row” (Pyke). This age range used to be normal for people to be purchasing homes, but now, this age group of graduates are becoming less likely to buy homes due to the increase in student loan debt over the years.

Student debt is hindering graduates from doing things in life because they are trying to figure out how they are going to pay off the debt while surviving which actually holds them back. These debts are burdens over their heads which disables them from enjoying life and living comfortably. Allesandra Lanza, a corporate public relations director for The American Student Assistance, with an experience in the industry of student loans for almost 20 years, has reports from surveys given to college graduates in her article, “Study: Student Loan Borrowers Delaying Other Life Decisions,” about how student loan debt has affected their decisions in life. She reports that;

“According to the survey, 62 percent of respondents said their student debt posed a hardship on their personal budget when combined with all other household spendings. Specifically, 35 percent said they found it difficult to buy daily necessities because of their student loans; 52 percent said their debt affected their ability to make larger purchases such as a car; and 55 percent indicated that student loan debt affected their decision or ability to purchase a home”(Lanza).

According to the reports from this survey, over half of college graduates have a tough time making economic decisions because of the wrath of paying back student loans.

Student loans can haunt people for almost their whole lives. There are have been a number of incidents where people have had money taken from their social security and also their tax refunds forcefully repaying their student loan debts. Robert Farrington a writer for Forbes magazine says that, “.When you buy a car, the collateral for the loan is the car. If you don’t repay these loans, the lender simply takes the house or car. But when you borrow with student loans, the collateral is your future earnings. If you don’t repay your student loans, the government will garnish your future earnings” (Farrington). After retirement, many people want to use their earnings to do things such as travel to other countries, but they can’t because student loans are still taunting them.

Katy Hopkins argues that student loans are actually beneficial in her article “Student Loans Pack Surprising Benefits: If you have a financial burden, it's worthwhile to look at its bright sides, too.” She says that “ If you're responsible for your student loans, they'll serve as a shining track record should you