Sehun Bolaji

Research and Audience Assignment 

11/26/19

 

Student Loans: Why is it a problem and why should we care?

     What is Student debt? Student debt is a form of debt owed by a student that has attended a college and/or university. It is used by many college students in the US in order to attend colleges and universities in order to gain an education. There are a lot of problems with this however and I don’t think people see the price of not paying off your loans or the risks of taking one out in the first place. For instance, student debt leads to negative credit report and wage garnishments ( Wage garnishment is when a court issued an order requiring your employer to withhold a certain amount of your paycheck and send it directly to the person on institution to whom you owe money, until your debt is paid off), according to https://www.aft.org/highered/student-debt-crisis . In other words, student loans lead to student debt which students will have to pay later on in life. The problem with this is that even after college students don’t get a job good enough to pay off these student loans, enabling them from paying it off. There are many negative effects of not paying off your student loans. As a matter of fact, it leads to bad credit reports, which affect credit, mortgage, and employment. This clearly states that not paying off your student loans gives you bad credit, which also has a direct, negative impact on your credit and employment. Which also means your chances of getting a job and/or house decreases tremendously, (according to https://www.aft.org/highered/student-debt-crisis ). Now let’s go back to what u was saying about students not being able to pay it off after college. After students are done with college they try to pay off their student loans to avoid all of the negative effects of not paying it off, but most times that is easier said than done. According to https://www.aft.org/highered/student-debt-crisis people take their whole lives to pay off student debt, which is most likely due to their inability to land a job that pays them well enough to get out of it, prohibiting them from living the life that they truly desire. Basically, they can’t pay off their debt after college because their education did not increase their earnings, which doesn’t seem like a fair deal to me. Another problem student debt can lead to is that is may stop you from pursuing your dreams. According to https://www.investopedia.com/articles/personal-finance/100515/10-ways-student-debt-can-destroy-your-life.asp there are two reasons why this is the case. Reason #1 is that You Might Have to Forego Grad School. 

Student loan debt can hinder you from attending graduate school. The average undergraduate accumulates $30,000 in student loan debt. Students who are leaving their undergraduate programs with significant amounts of debt often cannot afford to take out another massive loan. Basically, if you don’t pay off your student loans you won’t be able to attend another college or university, stopping you from getting the education to gain the job you dreamed of having. Reason #2 is that now you would have to go for the job that pays the higher salary, rather than that of the one that makes you happy. For example, you might have a desire to work for nonprofit organizations; however, you are likely to forego these aspirations for a job that pays more to cover your student loan payments. You may find yourself sacrificing a job, which offers you more fulfillment and purpose, for the job with a higher salary. Another negative affect student loans will have on your life is that if you don’t pay off your debt in time you are most likely to default. According to google, default is when you fail to fulfill an obligation, especially to repay a loan or to appear in a court of law. The negative effect of defaulting (according to “https://www.valuepenguin.com/loans/what-does-it-mean-to-default-on-a-loan” ),”When a loan defaults, it is sent to a debt collection agency whose job is to contact the borrower and receive the unpaid funds. Defaulting will drastically reduce your credit score, impact your ability to receive future credit, and can lead to the seizure of personal property”. In simpler terms, not paying off your student loans in time can lead to defaulting, which not only lowers your credit score, but gives the government the right to take away your personal belongings as payment, which can end up leaving you with nothing, still leaving you in debt. Student debt also seems to have a negative impact on people’s relationships. As a matter of fact, as stated by https://www.google.com/amp/s/www.buzzfeednews.com/amphtml/venessawong/36-terrifying-financial-horror-stories , One person even admitted that while he loves his wife, he regrets marrying someone with so much debt. He told buzzfeed news that “ I married someone with a lot of student loan debt. Don’t get me wrong, I love my wife more than anything in this whole world, but had I known the negative effect her loans would have on our life, I may have done things differently. Her loans are pretty much ruining our lives. They have made it so we basically can’t do anything, even though we both make good money. There are no vacations, no new clothes, no new vehicles, no savings account, no retirement accounts, struggles every month and especially around the holidays, when we can’t afford to buy our families presents. Every penny has to be thought about in our lives. I am almost 40, and I am a prisoner to her debt. I don’t think people realize just how damaging student loans can be. She has now paid more back than her original loan was for, but still owes the same amount she borrowed. If you can’t make double or triple payments, they just never go away. We are currently paying over $10,000 a year in INTEREST alone. It’s killing us, both financially and mentally. There is no break from stress EVER. If I could go back, I’d stay with my wife but not marry her, and I would keep our finances separate. I know I sound like an insensitive dick, but the amount of worry I’ve done over her loans is enough for two lifetimes”. Based off of what what said, this man can’t afford to be happy and enjoy his life with the woman he loves due to her student loans. He and his wife make enough money to go out on trips, buy houses and cars and live an extravagant lifestyle but is unable to due to her student loans. Instead of taking it easy and living life to the fullest he is forced to stay at home with her working constantly to try and pay off that debt, while fighting the anxiety and interest of it simultaneously. In conclusion, as more students are taking out student loans to pay for college, it essential to recognize the consequences of borrowing money and to be financially literate enough to borrow what is needed.