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Essay Samples on Student Loan Debt

Navigating the student debt crisis.

The student debt crisis in modern society is a pressing issue that has far-reaching consequences for individuals, families, and the broader economy. This essay delves into the complexities of the student debt crisis, examining its origins, the socio-economic implications it poses, the role of higher...

Student Loan Debt

Why Student Loans Should be Forgiven: A Path to Economic Relief and Opportunity

The burden of student loans has become a pressing issue for countless individuals pursuing higher education. As tuition costs rise and the job market becomes increasingly competitive, many graduates find themselves weighed down by student debt. In this essay, we will explore the reasons why...

Student Loans

Student Loan Debt: Looking for Ways to Manage Student Loans

Student loans are a pain for everyone involved. Many students are burdened with the weight of repayment, with their loans attractive large interests. Lenders are forced to find ways to recoup their monies, and are forced to shoulder the risk of bad loans on their...

Student Loan Debt Forgiveness as a Progressive or Conservative Concept

Introduction and Background The student debt crisis has never been more pertinent than at this moment. Student loans, currently at a whopping $1.6 trillion, have surpassed credit card and auto loans to be the largest source of household debt after mortgages (Walker, 2019). This level...

Reasoning Why College Should Not Be Free

A parent is their child’s first teacher and should remain their best teacher throughout their life. Parents only want the best for their children and help build their lives. From the first walk, the first failed test, the first time driving the car, to the...

College Tuition

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Why College Should Be Free: Student Debt Crisis

When I was in second grade I had huge aspirations for my future. When I thought of who I would be when I became the age I am now, I envisioned myself doing big things, I thought I would be in some fancy school, studying...

Current Student Loan System in the US

Currently, about 18% of American adults are still repaying nearly $ 1.6 trillion in student loans. In the past ten years, the total student debt in the United States has increased by 107%. These figures reflect a series of problems in the current debt system...

Debt As A Sign That College Is Not For Everyone

“Carnevale says that for almost all majors, the best school for your major isn’t going to be a good investment.”(3). College can be very pricey and not the right choice for everyone. You have the choice to do as one pleases, but most jobs, in...

College Education

Understanding Why College Is A Worth It

In 2019, the cost of college and college related debt are at an all-time high. Most people are willingly to stick to a regular nine to five job instead of going to college to actually get a degree. There are several reasons why they would...

Impact Of Student Loans On Student's Life And The Financial Value Of A Degree

Erin Velez, Melissa Cominole & Alexander Bentz (2019) Debt burden after college: the effect of student loan debt on graduates’ employment, additional schooling, family formation, and home ownership Articles core question- How does debt affect students' lives after earning their bachelors’ degree Research method Longitudinal...

College Students
Student Life

Student Loan Debt in 2020 is Now to Much

The democratic candidates for the 2020 presidential election have raised the issue of a student debt crisis that is striking young adults seeking higher education. Senator Warren and Senator Sanders are among these candidates who have brought the student debt issue that Americans hold to...

Here’s Your Crisis: Student Loan Debt Isn’t a Myth

These days, it is common knowledge that the university is luxurious. Most who attend college should take out student loans to even have enough money it. Although some agree with the scholar loan debt disaster is solely fictional, the pupil loan disaster needs to no...

Outstanding Student Loan Debt Will Likely Exceed $1 trillion - Student Debt Crisis

Multiple factors contribute to student debt. The growing problem of student debt has become more prominent and inspired many documentaries to investigate the cause and effect. One factor is the rate of the loan. Other factors include the emerging guidelines develops by the government. There...

Addressing the Student Loan Debt Crisis: An Analysis of its Impact on the Economy

When delving into the student loan debt crisis, one discovers that the total student loan debt in the United States amounts to a staggering $1.52 trillion. The average student borrower carries a debt of $31,172, and the duration to repay these loans can extend from...

The Effect of Student Loans on Post-Graduates

In modern-day society, a post-secondary degree is needed to compete for a well-paying job in the labour market. Higher education is viewed as a necessary long term financial investment to better oneself in their career, however, in reality, it is often a financial risk for...

Bachelor's Degree

Benefits of Student Loans and Debt for Colleges and Students

In today's society, it is almost impossible to successfully achieve an education without some type of aid or student loans. Student loan debt is increasing, due to the total cost of universities increasing their tuition fees. Once students start to graduate, they have what is...

The Worth of Having Student Loans for a Better Job

Benjamin Franklin said, “An investment in knowledge pays the best interest.” Learning is one of the most powerful tools we have in our belt and we can definitely utilize schooling to help further us in our lives. As it can further our careers, it can...

Cost of Education

The Abnormal Financial Load – A Problem Of College Education

A college education is not equitable something students can get in four forever; instead, it is also a quality of courage! Many Americans students are solicitation themselves, "Is pursuing a college position become the side?" College guardianship has almost sextupled since 1985, with the total...

Best topics on Student Loan Debt

1. Navigating the Student Debt Crisis

2. Why Student Loans Should be Forgiven: A Path to Economic Relief and Opportunity

3. Student Loan Debt: Looking for Ways to Manage Student Loans

4. Student Loan Debt Forgiveness as a Progressive or Conservative Concept

5. Reasoning Why College Should Not Be Free

6. Why College Should Be Free: Student Debt Crisis

7. Current Student Loan System in the US

8. Debt As A Sign That College Is Not For Everyone

9. Understanding Why College Is A Worth It

10. Impact Of Student Loans On Student’s Life And The Financial Value Of A Degree

11. Student Loan Debt in 2020 is Now to Much

12. Here’s Your Crisis: Student Loan Debt Isn’t a Myth

13. Outstanding Student Loan Debt Will Likely Exceed $1 trillion – Student Debt Crisis

14. Addressing the Student Loan Debt Crisis: An Analysis of its Impact on the Economy

15. The Effect of Student Loans on Post-Graduates

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A smarter way to solve the student debt problem

Blanket loan forgiveness less effective than helping those who need it most, research suggests.

Editor’s Note: This piece was written by Constantine Yannelis, an assistant professor of finance at the University of Chicago Booth School of Business, and shared by Chicago Booth Review . The essay is based on testimony Yannelis submitted to the U.S. Senate Committee on Banking, Housing, and Urban Affairs’ Subcommittee on Economic Policy in April 2021.

Education is the single highest-return investment most Americans will make, so getting our system of higher-education finance right is fundamentally important for U.S. households and the economy.

A key point in the student-loan debate is that the outcomes of borrowers vary widely. Undeniably, a significant number of borrowers are struggling, and are sympathetic candidates for some kind of relief. Student-loan balances have surged over the past decades. According to the New York Fed, last year student loans had the highest delinquency rate of any form of household debt.

Most student borrowers end up as higher earners who do not have difficulties repaying their loans. A college education is, in the vast majority of cases in America, a ticket to success and a high-paying job. Of those who struggle to repay their loans, a large portion attended a relatively small number of institutions—predominantly for-profit colleges.

The core of the problem in the student-loan market lies in a misalignment of incentives for students, schools, and the government. This misalignment comes from the fact that borrowers use government loans to pay tuition to schools. If borrowers end up getting poor jobs, and they default on their loans, schools are not on the hook—taxpayers pay the costs. How do we address this incentive problem? There are many options, but one of the most commonly proposed solutions is universal loan forgiveness.

Various forms of blanket student-loan cancellation have been suggested, but all are extremely regressive, helping higher-income borrowers more than lower-income ones. This is primarily because people who go to college tend to earn more than those who do not go to college, and people who spend more on their college education—such as those who attend medical and law schools—tend to earn more than those who spend less on their college education, such as dropouts or associate’s degree holders.

My own research with Sylvain Catherine of the University of Pennsylvania demonstrates that most of the benefits of a universal-loan-cancellation policy in the United States would accrue to high-income individuals, those in the top 20 percent of the earnings distribution, who would receive six to eight times as much debt relief as individuals in the bottom 20 percent of the earnings distribution. These basic patterns are true for capped forgiveness policies that limit forgiveness up to $10,000 or $50,000 as well.

Another problem with capped student-loan forgiveness is that many struggling borrowers will still face difficulties. A small number of borrowers have large balances and low incomes. Policies forgiving $10,000 or $50,000 in debt will leave their significant problems unaddressed.

While income phaseouts—policies that limit or cut off relief for people above a certain income threshold—make forgiveness less regressive, they are blunt instruments and lead to many individuals who earn large amounts over their lives, such as medical residents and judicial clerks, receiving substantial loan forgiveness.

A fact that is often missed in the policy debate is that we already have a progressive student-loan forgiveness program, and that is income-driven repayment.

If policy makers want to make sure that funds get into the hands of borrowers at the bottom of the income distribution in a progressive way, blanket student-loan forgiveness does not accomplish this goal. Rather, the policy primarily benefits high earners.

While I am convinced from my own research that student-loan forgiveness is regressive, this is also the consensus of economists. The Initiative on Global Markets at Chicago Booth asked a panel of prominent economists to weigh in on this statement: “Having the government issue additional debt to pay off current outstanding loans would be net regressive.” The panel included economists from leading institutions from both the left and the right. The results of the survey were telling. Not a single economist disagreed with the idea that student-loan forgiveness is regressive. This is because the facts are clear—to borrow a phrase commonly used, “The science is settled”—student-loan forgiveness is a regressive policy that mostly benefits upper-income and upper-middle-class individuals.

Another facet of this policy issue is the effect of student-loan forgiveness on racial inequality. One of the most distressing failures of the federal loan program is the high default rates and significant loan burdens on Black borrowers. And student debt has been implicated as a contributor to the Black-white wealth gap. However, the data show that student debt is not a primary driver of the wealth gap, and student-loan forgiveness would make little progress closing the gap but at great expense. The average wealth of a white family is $171,000, while the average wealth of a Black family is $17,150. The racial wealth gap is thus approximately $153,850. According to our paper, which uses data from the Survey of Consumer Finances, and not taking into account the present value of the loan, the average white family holds $6,157 in student debt, while the average Black family holds $10,630. These numbers are unconditional on holding any student debt.

Thus, if all student loans were forgiven, the racial wealth gap would shrink from $153,850 to $149,377. The loan-cancellation policy would cost about $1.7 trillion and only shrink the racial wealth gap by about 3 percent. Surely there are much more effective ways to invest $1.7 trillion if the goal of policy makers is to close the racial wealth gap. For example, targeted, means-tested social-insurance programs are far more likely to benefit Black Americans relative to student-loan forgiveness. For most American families, their largest asset is their home, so increasing property values and homeownership among Black Americans would also likely do much more to close the racial wealth gap. Still, the racial income gap is the primary driver of the wealth gap; wealth is ultimately driven by earnings and workers’ skills—what economists call human capital. In sum, forgiving student-loan debt is a costly way to close a very small portion of the Black-white wealth gap.

How can we provide relief to borrowers who need it, while avoiding making large payments to well-off individuals? There are a number of policy options for legislators to consider. One is to bring back bankruptcy protection for student-loan borrowers.

Another option is expanding the use of income-driven repayment. A fact that is often missed in the policy debate is that we already have a progressive student-loan forgiveness program, and that is income-driven repayment (IDR). IDR plans link payments to income: borrowers typically pay 10–15 percent of their income above 150 percent of the federal poverty line. Depending on the plan, after 20 or 25 years, remaining balances are forgiven. Thus, if borrowers earn below 150 percent of the poverty line, as low-income individuals, they never pay anything, and the debt is forgiven. If borrowers earn low amounts above 150 percent of the poverty line, they make some payments and receive partial forgiveness. If borrowers earn a high income, they fully repay their loan. Put simply, higher-income people pay more and lower-income people pay less. IDR is thus a progressive policy.

IDR plans provide relief to struggling borrowers who face adverse life events or are otherwise unable to earn high incomes. There have been problems with the implementation of IDR plans in the U.S., but these are fixable, including through recent legislation. Many countries such as the United Kingdom and Australia successfully operate IDR programs that are administered through their respective tax authorities.

Beyond providing relief to borrowers, which is important, we could do more to fix technical problems and incentives. We could give servicers more tools to contact borrowers and inform them of repayment options such as IDR, and we could also incentivize servicers to sign more people up for an IDR plan. But while we may be able to make some technical fixes, servicers are not the root of the problem in the student-loan market: a small number of schools and programs account for a large portion of adverse outcomes.

To fix this, policy makers can also directly align the incentives for schools and borrowers. For example, Brazil, which has had similar problems with its student-loan program, recently gave schools skin in the game by requiring them to pay a fee based on dropout and default rates. This helped align the incentives of the schools and the student borrowers. Making revenues go directly to schools from IDR plans, or implementing income-share agreements in which individuals pay an uncapped portion of their income, could also help align the incentives of schools, students, and taxpayers.

Federal student loans are an important part of college financing and intergenerational mobility. The root of our student-loan crisis is a misalignment of incentives. Since the problem has been so slow moving and continuous, I like the analogy of a frog slowly boiling in a pot of water over a flame. Policies such as student-debt cancellation are not extinguishing the flame—they aren’t fixing the incentive problem. All they do is move the frog into a slightly cooler pot of water. And if we don’t fix the core of the problem, even if we forgive $50,000 of debt for current borrowers, balances will continue to grow, and we will be facing a similar crisis in 10 or 20 years.

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Is it fair to forgive student loans? Examining 3 of the arguments of a heated debate

Scott Horsley

Student loan borrowers stage a rally in front of The White House on Aug. 25 to celebrate President Biden cancelling student debt. The plan has sparked heated debate, including about its economic fairness. Paul Morigi/Getty Images for We the 45m hide caption

President Biden's plan to forgive hundreds of billions of dollars in student debt is sparking heated debate.

Biden last week announced plans to forgive up to $20,000 in federal student loan debt for Pell Grant recipients and up to $10,000 for others who qualify.

The news will provide relief for borrowers at a time when the cost of higher education has surged.

Student loan forgiveness is politically popular. But not all Democrats are on board

But critics are questioning the fairness of the plan and warn about the potential impact on inflation should the students with the forgiven loans increase their spending.

Here are three key arguments – for and against the wisdom of Biden's decision.

Raising living standards or adding fuel to inflation?

Undoubtedly, student debt is a big burden for a lot of people.

Under Biden's plan, 43 million people stand to have their loan payments reduced, while 20 million would have their debt forgiven altogether.

People whose payments are cut or eliminated should have more money to spend elsewhere – maybe to buy a car, put a down payment on a house or even put money aside for their own kids' college savings plan. So the debt forgiveness has the potential to raise the living standard for tens of millions of people.

Critics, however, say that additional spending power would just pour more gasoline on the inflationary fire in an economy where businesses are already struggling to keep up with consumer demand.

Inflation remains near its highest rate in 40 years and the Federal Reserve is moving to aggressively raise interest rates in hopes of bringing prices back under control.

Not all economists believe the debt forgiveness will do much to fuel inflation.

Debt forgiveness is not like the $1200 relief checks the government sent out last year, which some experts say added to inflationary pressure. Borrowers won't suddenly have $20,000 deposited in their bank accounts. Instead, they'll be relieved of making loan payments over many years.

President Biden announces student loan relief in the Roosevelt Room of the White House in Washington, D.C. on Aug. 24. Olivier Douliery/AFP via Getty Images hide caption

President Biden announces student loan relief in the Roosevelt Room of the White House in Washington, D.C. on Aug. 24.

Because the relief is dribbled out slowly, Ali Bustamante, who's with left-leaning Roosevelt Institute says Biden's move won't move the needle on inflation very much.

"It's just really a drop in the bucket when it come to just the massive level of consumer spending in our very service- and consumer-driven economy," he says.

The White House also notes that borrowers who still have outstanding student debt will have to start making payments again next year. Those payments have been on hold throughout the pandemic.

Restarting them will take money out of borrower's pockets, offsetting some of the additional spending power that comes from loan forgiveness.

Helping lower income Americans or a sop to the rich?

Another big point of contention has to do with fairness.

Forgiving loans would would effectively transfer hundreds of billions of dollars in debt from individuals and families to the federal government, and ultimately, the taxpayers.

Some believe that transfer effectively penalizes people who scrimped and saved to pay for college, as well as the majority of Americans who don't go to college.

They might not mind subsidizing a newly minted social worker, making $25,000 a year. But they might bristle at underwriting debt relief for a business school graduate who's about to go to Wall Street and earn six figures.

Students from George Washington University wear their graduation gowns outside of the White House in Washington, D.C, on May 18. Economists worry President Biden's plan to forgive student loans could encourage more people to take on debt in the hopes of also being forgiven. Stefani Reynolds/AFP via Getty Images hide caption

The White House estimates 90% of the debt relief would go to people making under $75,000 a year. Lower-income borrowers who qualified for Pell Grants in college are eligible for twice as much debt forgiveness as other borrowers.

But individuals making as much as $125,000 and couples making up to $250,000 are eligible for some debt forgiveness. Subsidizing college for those upper-income borrowers might rub people the wrong way.

"I still think a lot of this benefit is going to go to doctors, lawyers, MBAs, other graduates that have very high earnings potential and may even have very high earnings this year already," says Marc Goldwein senior policy director at the Committee for a Responsible Federal Budget.

Helping those in need or making college tuition worse?

Goldwein also complains that the loan forgiveness doesn't address the larger problem of soaring college tuition costs.

In fact, he suggests, it might make that problem worse — like a Band-Aid that masks a more serious infection underneath.

For years, the cost of college education has risen much faster than inflation, which is one reason student debt has exploded.

And now what? The question that follows Biden's student loan forgiveness plan

By forgiving some of that debt, the government will provide relief to current and former students.

But Goldwein says the government might encourage future students to take on even more debt, while doing little to instill cost discipline at schools.

"People are going to assume there's a likelihood that debt is canceled again and again," Goldwein says. "And if you assume there's a likelihood it's canceled, you're going to be more likely to take out more debt up front. That's going to give colleges more pricing power to raise tuition without pressure and to offer more low-value degrees."

The old rule in economics is when the government subsidizes something, you tend to get more of it. And that includes high tuition and college debt.

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Student Loan Debt Essay Examples

Student loan crisis in america.

Since the wake of the Great Recession many people were affected are still struggling to make up their loses. Recession was the penuchle of the student loan debt crisis. The Crisis not only affects students and parents but lenders, employers, taxpayers and colleges. The Great...

The Cancellation of Student Loan Debt in the Us

Today, 44 million Americans, or one-eighth of the total population that is older than 18, have student loan debt2. On aggregate, student loan debt accounts for 1. 5 trillion of the national debt; however, this figure does not include private student loans which are not...

Student Loan Debt Issue in the Past and Today

One of the biggest decisions high school seniors have to make is whether to continue their academic careers and go off to college. Deciding where to go will certainly have an impact on the student’s life. In most cases, one of the biggest deciding factors...

The Crisis of Student Loan

The aspects of education loans.

In today's society, it is a norm and an expectation for students to pursue higher education after graduating from high school. Despite a college degree almost being deemed a prerequisite to adulthood, college tuition is on the rise, and a lot of students are left...

Free Colleges Would Resolve the Problem of Students Debt

“From the past years, student loan debt rose by 39%, reaching as much as $1.3 trillion”. If college was free, student loans/debt would be eliminated; the money used on tuition could easily be carried over to cover other costs such as a house, car, and...

An Urgent Need to Adress Student Loan Debt Crisis in America

The student loan crisis is the biggest issue effecting young adults in America. Many economists are suggesting that it may be the most devastating economic since the recession during the President Bush administration. A smaller segment of economists are concerned that the economic downside of...

Critical Reflection on Debt Cleanse by Jorge P. Newbery

I am rating “Debt Cleanse” by Jorge P. Newbery three out of four stars. “Debt Cleanse” is an exhaustive study, as the subtitle promises, on “How to Settle Your Unaffordable Debts for Pennies on the Dollar (And Not Pay Some at All)”. The author details...

How Students Deal with Student Loan Debt

College students have an unfair advantage when it comes to debt. A student can encounter debt from generational impulse buying. Parents can have poor buying habits and poor habits can be linked to family behavioral problems. Parents who overly exceed their financial resources will produce...

Review of the Book Debt Cleanse by Jorge P. Newbery

The premise of Debt Cleanse is that people often become overburdened with debt simply through ordinary living. They want to attend college, have a car to drive to work, or own a home. These perfectly reasonable desires generate student loans, vehicle loans, and mortgages. Or...

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About Student Loan Debt

Student debt is a form of debt that is owed by an attending, formerly withdrawn, or graduated student to a lending institution, or to a financial institution.

Students who graduate with debt will feel the effects of their debt for years after they graduate because it is also a very “sticky” form of debt. You can escape other debt through bankruptcy, but it’s almost impossible to get out of your student debt without paying it in full. It can cause stress, anxiety and force people to delay important life events

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