It’s true that America is one of the world’s super powers, however it also has serious some issues. One of these that is troubling students in America are the student loans. This is one of the largest issues ever and if it is not controlled, the country will run the risk of bankruptcy. The following are just a few of the reasons why student loans could damage the country.
The higher education system in America is one of the best in the world, with many people travelling from all over the globe just to be a part of it, as they know that they will get the education that they can use when they return to their own country. However, only American students can take out student loans, as this is not something that is applicable to the International students. One of the largest issues with the student loan system is bankruptcy does not erase the entire loan. There are only a few ways in which student loans can be erased, another issue is the current design of the student loan program.
When student loans were originally created, many people went to local or public colleges, some of which are as good or better than their private counterparts. The thing that all of the private colleges have in common is that they are more expensive than a good public college. A lot of the prestige comes down to the cost and because they are all competing for students, the education prices increase, to the dismay of students. The problem is not with the loan system as much as it is with the economy, seeing as unemployment amongst the young graduates is at an astonishing low.
When the baby-boomer generation graduated, it was relatively easy to get a good job with a decent wage, however this is not the case nowadays. Many people dream of working for huge companies such as Google, Microsoft etc. These are all excellent companies which pay high salaries and offer great benefits and there are many that will spend their entire working life in these jobs. The problem though is that these really big, successful companies only take the very best students from the top schools.
Therefore, if the student attends Boston college as opposed to Harvard University they will be faced with a much harder challenge to get work even if they have the exact same qualifications. Whilst this is not fair, life rarely is, and or those graduates who are unable to land the well-paying jobs, they will have a hard time paying off their loans. As there are so many students now in this predicament, America is running a huge risk of bankruptcy. This is not a welcome situation and the chances are that it will not end well.
At least half of the student loan borrowers will still be in debt when they reach their mid-30s, with the average balance rising by more than 70% over the past ten years. This in turn means that young people have either very little scope to save or no savings whatsoever. Unless there is something done soon to either lower college fees or student debts the graduates will simply live in an ever turning cycle of debt and the reality is that they will struggle to save for a down payment on their own home.
On the other side of the coin, those without some college education will find that their earning capacity and job prospects are severely limited, and it is still the case that going to college will have a high return in the long run. Therefore, currently, it appears that the only way forward for those due to continue their studies is to burden themselves with debt and hope that something is done to assist them in the future.
There is no doubt that America is in the throes of a serious student loan crisis, one that unless it is controlled soon, could escalate into something serious.