Student Loan Debt And The Affect It Is Having On The American Economy
2. Works Cited and Annotation
Orman, Suze. "Biggest Economic Threat? Student Loan Debt." USA Today. usatoday.com, 25 Oct. 2014. http://www.usatoday.com/story/money/personalfinance/2014/10/25/student-loan-debt/17773131/
a. Orman discusses that the biggest economic threat is student loan debt at $1.2 trillion
b. Total student debt has grown more that 150% since 2005, but not from inflation. Its’s because overall prices increased 22% between 2005- 2014. Additionally, the profit margin is partially to blame for high interest rates. The rate on federal undergraduate loans at 4.66%, 6.2% for graduate, and 7.2% for parents borrowing through the PLUS program. With these rates from just this year alone, which means even higher student loan rates in the coming years.
c. Overall, “Sen. Elizabeth Warren, D-Mass., has introduced legislation that would allow student loan borrowers to refinance their loans at rates below 4% for undergrads and under 7% for PLUS loans; essentially rolling back rates to where they were before this academic year, when Congress instituted its new higher-rate regime and eliminated a lower subsidized rate on Stafford loans entirely” (Orman). So there are solutions, they are just being met with resistance.
Korkki, Phyllis. "The Ripple Effects of Rising Student Debt." The New York Times. The New York Times, 24 May 2014.…