Getting into college is a huge accomplishment in anyone’s life, but no one seems to prepare one for the stresses of student debt that come with it. A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. In the past decade, student debt has surpassed $1 trillion, an increase of over 300%, and people simply cannot pay the money they owe. The stress of unpaid student loans causes a huge weight on a lot of people’s shoulders, a weight so heavy that many people can’t handle it and become extremely depressed. Not only is student debt negatively affecting the lives of students, but also affecting the economy as well. Student debt will only continue to rise unless someone or something stops it. A number of changes need to occur in order to help decrease student debt which will help stabilize the United States.
There are several examples that show this, and one of them is that the huge amount of student debt is destroying the American economy. Unpaid finances affect the rest of a person’s life as well. They cannot pay off their mortgages, or their cars because of their enormous debt.
The U.S. economy survives off of Americans paying off their homes and buying cars, thus explaining why the economy is currently so low. In the Times article, Student Loans Are Ruining
Your Life. Now They're Ruining the Economy, Too, the author states, “Consumer purchasing is the primary driver of the U.S. economy, and mortgages play a big role as well” (Frizell). As student debt continues to increase, people become less likely to purchase nonessential items.
With large amounts of debt to pay off, people lack any extra money to buy any consumer goods unless it is absolutely necessary. Josh Freedman, a journalist of Forbes Magazine, explains that
“individuals with more student loan debt were less likely than individuals without student loan debt to purchase homes or cars” (“Student Loans Are A Drag On The Economy And Society”).
Having to pay off student loans inhibits a person to move on with their life after graduating college. The large loans cause one’s credit to decrease, prohibiting someone to purchase a home, or a car. This creates a cycle of endless distress for a person, considering more money will be spent for transportation and renting an apartment/home instead of paying off one’s student loans. The downside to not paying a person’s student loans on time only creates a more difficult situation for said person. “As student loan levels continue to pile up for students of all incomes, the burden of interest payments in addition to paying back the principal of the loans will serve to constrain the economy even more” (Freedman, Forbes). The struggle to pay student loans on time causes one’s debt to increase due to interest. While interest from student loans comes into effect, this only damages the economy even more than without interest. The idea of paying interest towards student loans was created to motivate people to pay off their loans quicker, eliminating their debt sooner rather than later. The flaw in this plan is that, because of the failing economy, less people have jobs which will provide money for one to pay off their loans, and without money, interest will only cause their debt to become larger, digging a hole that is too deep for someone to climb out of. While student debt increases, the
U.S. economy will end up in an endless downward spiral with no hope of restoration. No one has money to purchase consumer goods as they struggle to pay off their federal student loans,
causing businesses to close and people losing their jobs, making it even harder for them to fix their debt.
In addition, federal student loans are inevitable. Once someone attends college, whether they graduate or not, student loans still need