James Reid

2nd hour

10-27-16

Dear next president,

Graduation is supposed to be a joyful moment, but it also means that it’s time to start paying off student loans. Student debt has reached 1.3 trillion dollars and is the second largest source of debt in America. Many students are struggling to pay off these loans and need help. And for kids like me who want to attend college, we need better options so we can avoid getting into debt. But there is one business that benefits from these loans while everyone connected to this issue suffers the consequences and that’s the colleges themselves.

How did this start? The first federal student loans became available in 1958, and were designed to help more kids go to college. Some argued that it would also help people in low income households get out of poverty. This seemed like a great idea, but the consequences that followed have hurt many people, and the economy as a whole.

Many things contributed to this problem. One of the main factors is that while people may think that we have cut down on funds for colleges making them have to increase tuition it is the exact opposite. Over the past few decades federal spending for colleges have increased tenfold, allowing them to expand and go after more students who may be more subjected to buy more loans. Another factor may be that easy access to loans has allowed colleges to increase tuition because of greater demand. These two combined created a big strain on students who were enrolling or currently enrolled. There must be a better way for people to be successful in life, because what’s happening now isn’t working.

Student debt not only costs a lot it can last a long time. It may seem like you can pay the debt in a few years, but your loan could follow you for the rest of your life. The Bank of New York states that, “Americans are now carrying substantial amounts of student debt well into their forties and fifties.” Many people can’t escape from this cycle of debt, and the amount of default loans are out of control.

After you complete school you’re not guaranteed to get a job. Also, the career you choose may not pay you a good enough salary when you get hired to pay for all the expenses of everyday life. According to an article from Bloomberg titled, “This is how badly we’re treating our student debt” the author states “Two in five student loans are either late, in default, being postponed, in disability, or bankruptcy.” If those loans aren’t paid back the U.S government loses money that it could be using for things like hospitals, infrastructure, and epidemics like the Flint water crisis.

This problem as a whole hurts everyone no matter what side of the business you’re on. The CFPB states that, “All the money that people are not able to traditionally save right after college is less money that they would put away in tax-deferred retirement plans, pension plans.” This is a massive hit to banks because they use that extra money to invest in the stock market to get them an increased budget. This makes it so that can’t expand to more rural areas where they might be needed

This is a big problem that has many ways of being solved, but I think that part of this problem can be solved relatively easily. A lot of current problems students are facing today are because of increased tuition rates caused by colleges expanding too fast and student loans becoming more accessible to the general public. I propose that before people or students who are thinking about going to college need to get counseling on their loans, and should ask professionals what kind of jobs they could get that would allow them to have a job they like, but pays enough so they can pay off their loans.

This problem creates a huge burden on students and former students alike, and it either doesn't go away or takes an insane amount of time to finally get solved. No one wins when dealing with this debt, except for colleges. So pretty much everyone either losses money or has a mountain of stress ands debt. This is why Student loans are a big problem and need to be solved for future generations.

sincerely,

James Reid