Student Debt Crisis
1.0 Introduction
A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other 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 education. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy.
There are two types of student loan that can be applied which are federal student loan and private student loan. Basically, students are more prefer to make a loan in federal student loan because the fixed interest rate wouldn’t affect the payment that they have to pay even the interest rate rise. In addition, government also provide free insurance in federal student debt. So that, if the borrower was disabled or killed, the loan automatically will be cancelled. 2.0 Issue
In the past three decades, the cost of attaining a college degree has increased more than 1,000 percent. Two-thirds of students who earn four-year bachelor’s degrees are graduating with an average student loan debt of more than $25,000, and 1 in 10 borrowers now owe more than $54,000 in loans. Especially for African America and Latino student that they are burdened with student debt which are 81 percent of African American students and 67 percent of Latino students who earned bachelor’s degrees leaving school with debt. Other than that, 64 percent of white students also graduate with debt. With $864 billion in federal student loan and $150 billion in private student loan, now the total student debt is more than $1 trillion.
3.0 Factors 4.1 Increase in education cost
The cost of a college degree in the United States has increased "12 fold" over the past 30 years, far outpacing the price inflation of consumer goods, medical expenses and food. According to Bloomberg, college tuition and fees have increased 1,120 percent since records began in 1978. Because of the increasing in the
A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other 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 education. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy.
There are two types of student loan that can be applied which are federal student loan and private student loan. Basically, students are more prefer to make a loan in federal student loan because the fixed interest rate wouldn’t affect the payment that they have to pay even the interest rate rise. In addition, government also provide free insurance in federal student debt. So that, if the borrower was disabled or killed, the loan automatically will be cancelled. 2.0 Issue
In the past three decades, the cost of attaining a college degree has increased more than 1,000 percent. Two-thirds of students who earn four-year bachelor’s degrees are graduating with an average student loan debt of more than $25,000, and 1 in 10 borrowers now owe more than $54,000 in loans. Especially for African America and Latino student that they are burdened with student debt which are 81 percent of African American students and 67 percent of Latino students who earned bachelor’s degrees leaving school with debt. Other than that, 64 percent of white students also graduate with debt. With $864 billion in federal student loan and $150 billion in private student loan, now the total student debt is more than $1 trillion.
3.0 Factors 4.1 Increase in education cost
The cost of a college degree in the United States has increased "12 fold" over the past 30 years, far outpacing the price inflation of consumer goods, medical expenses and food. According to Bloomberg, college tuition and fees have increased 1,120 percent since records began in 1978. Because of the increasing in the