Student Loan Debt and the Economy
Ever since the idea of going to college was created students have always worried about how they were going to pay for it. In 1958 the government thought of a solution and the first federal loans for college were introduced (New America Foundation). shortly after former students started to struggle with paying them back, 57 years later students are still fighting the same battle. with interest rates and the costs of tuition rising students are still encountering the same hassle if not even worse. In March of 2014 the average student loan debt in America was around $30,000, A few years earlier in December of 2008 the average student debt was only $20,450. That is a 25% increase in less than 6 years. However the …show more content…
With the burden affecting the borrower 's life greatly it also diminishes the local economy. Another way that student loans affect the economy is small businesses. Phyllis Korkki from the Los Angeles Times stated that “people with student loans are less likely to start businesses of their own”. If less people open up their own mom and pop stores then that drastically decreases the small business market. If people stop opening their own businesses then all that is left are the businesses that already have monopolized most of the industry. This mainly affects the local economy as well, when people shop at small businesses it helps stimulate economy in the town that the shop is in. If there are fewer small businesses then people will have no choice than to spend their money at the large business which in turn harms the local economy in which a former student might live in.
Some students won’t even try applying to a four year school because they are afraid of the vast student debt. “A collection of student debt may well cause people to make different decisions than they would otherwise” (Korkki). These students may never even end up going to college. Some of these students have the potential to do great things but they are financially restricted and do not have the means to take out a loan. These same students might end up working at a dead end job for the rest of their lives simply because they did not want or just could not immerse themselves in the massive student
Ever since the idea of going to college was created students have always worried about how they were going to pay for it. In 1958 the government thought of a solution and the first federal loans for college were introduced (New America Foundation). shortly after former students started to struggle with paying them back, 57 years later students are still fighting the same battle. with interest rates and the costs of tuition rising students are still encountering the same hassle if not even worse. In March of 2014 the average student loan debt in America was around $30,000, A few years earlier in December of 2008 the average student debt was only $20,450. That is a 25% increase in less than 6 years. However the …show more content…
With the burden affecting the borrower 's life greatly it also diminishes the local economy. Another way that student loans affect the economy is small businesses. Phyllis Korkki from the Los Angeles Times stated that “people with student loans are less likely to start businesses of their own”. If less people open up their own mom and pop stores then that drastically decreases the small business market. If people stop opening their own businesses then all that is left are the businesses that already have monopolized most of the industry. This mainly affects the local economy as well, when people shop at small businesses it helps stimulate economy in the town that the shop is in. If there are fewer small businesses then people will have no choice than to spend their money at the large business which in turn harms the local economy in which a former student might live in.
Some students won’t even try applying to a four year school because they are afraid of the vast student debt. “A collection of student debt may well cause people to make different decisions than they would otherwise” (Korkki). These students may never even end up going to college. Some of these students have the potential to do great things but they are financially restricted and do not have the means to take out a loan. These same students might end up working at a dead end job for the rest of their lives simply because they did not want or just could not immerse themselves in the massive student