Reading the following article. What is the problem? Why is it happening? Is the problem going to get better or worse? Why? What are some solutions? What is the long term impact?
19 Comments
Marie Masyczek
4/4/2012 12:01:12 pm
The problem is that student loan debt has just surpassed the credit card and auto-loan debt with over $1 trillion still needed to be paid. Students are finding that because the economy is down in terms of new jobs, they are not able to pay off their student loans. With the idea that they would get a job if they had more education, thy borrow more money and the debt increases. Mark Zandi, an economist at Moody's Analytics, describes this cycle as a "hook" that keeps them building debt, not being able to get out. William Brewer of the National Association of Consumer Bankruptcy Attorneys notes that signs of distress are appearing, such as they did with mortgage problems in 2006 and 2007. These signs will eventually lead to the government's action of taking the borrower's wages or seize federal benefit payments such as Social Security. Obama has pledged the idea of extending tuition tax credit, doubling work-study jobs and consolidating multiple student loans at a lower interest rate. If no change occurs and student loan interest rates keep rising, the United States will have more than 7 million students in debt and $6.3 billion more in repayment costs.
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Serafin Lopez
4/4/2012 12:38:59 pm
The Problem in this article is that student loan debt is going out of control. It is so bad that student loans alone surpasses that of credit card and car-loan debt. There are many reasons why this is happening from people who can't find a job so they go back to school to further educate themselves to people who are either having trouble to pay a the loan or simply not paying back at all. William Brewer who is the president of the National Association of Consumer Bankruptcy attorneys stated that "This could very well be the next debt bomb for the U.S Economy". For the mean time the problem won't get any better. New figures have come out for the 7million students who will be attending college for the 2012-2013 term at 6.3 billion dollars if interests rates double on July 1st. Obama has come out with some possible solutions for this debt crises such as: extending the current tuition tax cut,double-work study jobs for the next five years, and let borrowers consolidate multiple student loans at reduced interest rates. In the long run you may see that the housing market get worse due to young people not being able to afford houses. Taxpayers will be struggling to pay their taxes due to people not paying their student loans off.
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Ian McCaffrey
4/4/2012 03:13:22 pm
Student loans were created at one time to help students pay for their tuition in the thought that the would be able to return or pay back this borrowed money after schooling. However, in recent times this is not happening, and student debt has surpassed both automotive and credit card debt to reach a staggering amount of a trillion dollars. This problem is occurring for several reasons, the first of which is poor unemployment. If students get out of school and their are no job openings, then they will not be able to secure the funds needed to pay off their loans. Second is the cost of schools, which have reached record highs in recent years. Because schools are becoming more expensive, more money is needed for a student to go to these schools, leading to more money to pay off in the future, job or not. Unless measures are taking to stop this problem it will continue to get worse because the rates of tuition are increasing faster than inflation. However, if the economy grows, there will be more job opportunities and more money for these students to pay off. When student loans don't get repaid, debts are going to be transferred from the borrower to the taxpayer. A solution is lowering the cost of tuition and offering the loans with reduced rates making them easier to pay off. If they are not, a long term impact could be slamming taxpayers and the still-ailing housing market.
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Edward Ortiz
4/5/2012 07:48:01 am
The problem in this article is, the debt from student loans is too common for graduating college students. It is so common for a student to have debt that it surpasses debt from credit card loans and auto loans, which are attainable by practically anyone. The student loans started out to help the student get through schooling and get a degree that in return would reward him or her with a high enough paying job that they would be able to pay off their bills. Well, now there are many things that are working against that theory, for one, colleges aren’t giving as much money for grants and scholarships, so there is more money to be borrowed. Second, students aren't able to find jobs after they get out of school, many are forced to get a low paying job or move back in with their parents. To fix this problem Obama has presented a couple solutions by: doubling work study jobs, lowering the cost of tuition, and reducing the interest rates on the loans making it cheaper to pay off. If this solutions arent put into effect than many more students will fall into debt and taxpayers will be forced to pay for them.
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Ken Marsh
4/5/2012 10:48:07 am
The problem in this article is that student loans are giving people too much debt now. The student loan debt is up to more than a trillion dollars, this means more than auto and credit card debts even. Student loans, when they started back in 1965 were there to get students on their feet and they could pay them back when the get their job and started working. Since unemployment is still pretty high not enough students are getting jobs to pay off those loans. College/Universities in the United States are also just recently raising the prices of tuition, this does not help the could be jobless student who is trying to stay out of debt. The student loan could get better if the government makes a smaller impact on giving loans out too easily, if you can get a loan make sure you'll be able to pay for it. This will not be so good now, but its long term effect will be for the better because private loan companies will be able to compete again. The housing market fell because government gave loans to easily, hopefully the United States will learn from that and not let that happen to student loans. Truth is, artificially low interest rates hurts the economy and us long term, there is proof in the housing market crash a couple of years, if we don't want this to happen we need to either make school cheaper or make taxpayers pay for public colleges/universities, the same way public high schools are paid. We would only need to do this until the trillion plus dollars are paid off, that may be a while though. Only time will tell what will happen to student debt.
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Alex Quirici
4/5/2012 12:38:29 pm
In the article Recovery Threatened by Runaway student loan debt, the problem concerning people not being able to pay off there studend loans is addressed. This problem is becoming more common in our nation due to the fact that people are borrowing all this money from the government to pay for a college education and they arent able to pay it back. With our poor economy it is difficult for young people to find work after college in order to pay off there loans.It doesnt look like this problem is going to get better anytime soon. College tution is getting more expensive while less and less jobs are presenting themselves. If the economy suddenly speeds up, it should help people intake more profit which would help lessen the loans they owe. Some solutions would be to have the government and the nations colleges collaborate and work out a deal to help lessen the debts the prior students owe. The long term impact is that the government is going to lose money which in other words means that the whole united states economy probably wont increase anytime soon.
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Monica Perez
4/5/2012 01:00:21 pm
The problem occuring is that student debt, more than $1 trillion, has surpassed that of credit-card and auto debt. There are many reasons for this debt. Unemployment rates are low, and in order to get a job with a good pay people have to get loans in order to continue with their education. And by getting a good job afterward, they would have to use that to then pay off their loans. With schools getting more expensive, more money is being borrowed, leading to more money being needed to pay off what you borrowed. If something isn't done about college tuition or financial help for students this situation isn't going to be getting better anytime soon. Also, this student-debtness hasn't caught the attention of the GOP candidates and if they don't think this is an important issue then it will be harder for this situation to get better. If the economy gets better and there are more jobs, then it could make it a bit easier for those who had loans to repay them. A solution could be lowering the tuition rates or offering more help while students are in college. If something isn't done the long term impact will be more people being in debt and part of the burden will be on taxpayers.
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Sarah McClure
4/5/2012 01:08:22 pm
The issue in the article, “Recovery Threatened By Runaway Student Loan Debt” is that student loan debt has recently been getting out of control. Reaching a crazy $1 trillion still needing to be paid off. This problem is happening because of various reasons; colleges aren’t giving out as much money as they have in previous years, therefore making students take out more loans. Another reason is that it has become more difficult for students to find work once they are out of school, forcing them to resort to getting low paid jobs. It has even been said that, “This could very well be the next debt bomb for the U.S. Economy”. Obama had been working to resolve this issue by doubling work-study jobs, and bringing down the cost of tuition, along with reducing interest rates on loans, making them cheaper to pay off. In the long run the government is going to lose money which means that as a whole the economy won’t increase anytime in the near future.
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Monica Olguin
4/5/2012 04:40:50 pm
Student loans used to be a helpful way to pay off college tuition. The generous distribution of student loans has been abused. Too many students are not paying back loans, which has led to the shocking automotive and credit card debt, currently amounting to over one trillion dollars. Unemployment is a huge factor. If students are graduating from college, but cannot find work, then they won’t be able to pay off their student loans. The main cause of this mess, is because tuition fees are steadily increasing, which will only rack up more student loans, continuing this cycle. I definitely envision this issue getting worse if colleges continue to hike up tuition costs. Obama suggested that Congress should double the work study program for the student’s benefit, and also reduce the interest rates of the student loans. If the interest rates decreased, I think that we would see more loans paid off. This will not only please the borrower, but also the taxpayers. When borrowers fail to take responsibility for their loans, the taxpayers end up paying off these loans. Lowering the cost of tuition and interest rates on loans are the only solutions I can think of that will boost the economy, so that college will become more affordable and so that the taxpayers are not left with the borrower’s responsibility.
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Kevin Churchill
4/19/2012 06:47:58 am
Student loans are becoming increasingly common and increasingly expensive. With a suffering job market, many students are having difficulty finding work after college. However, many people are going to college solely to increase their chances of landing a good job, but to no avail. Students are exiting college with hundreds of thousands of dollars in debt, leaving them in an awful position before their independent lives begin. The issue is becoming worse as more and more students attend more expensive colleges, with no extra financial aid to compensate for the rising prices. Lowering tutition could greatly help the situation, as financial aid would then help cover a higher percentage of the cost. In the long run, this problem will devastate the economy, as nearly all young adults will be faced with ridiculous amounts of debt. Tax payers should not have to bear the cost of unpayed student loans, but they will have to if the current system continues.
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Peter Del Bondio
4/19/2012 02:18:47 pm
The problem is that student loans are escalating at an outrageous rate. The amount of debt due to student loans has surpassed credit-card debt and auto-loan debt. This is happening because students are taking out loans to get their education but can not find a job after they graduate to pay off the loan. Then to make matters even worse, they return to school to get a higher education and just pile more and more onto their already existing debt. Most likely the problem is going to get worse because of the increasing cost of tuition at universities and the only way i see that matters could get any better is if the government works out a deal to lessen the debt for those who have been in debt for a long time and are desperately struggling to pay back debt. The overall long term effect will probably be along the lines of our economy sinking further and further into the crap that we are already stuck in...
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Gemma Aquilina
4/19/2012 02:25:11 pm
Federal student loans were created with the hopes that after graduation, students would have a job and subsequently be able to pay off their loans. This, however, is not the case. Currently, the U.S. student loan debt exceeds that of credit card and auto-loan debt. Such a large debt erases much hope for a strong recovery. This situation is not only a problem for taxpayers but could also foreshadow another economic crisis. Loans have become harder to pay off due to the extremely limited jobs available. Many students unable to find a job take the time to continue with their education, which in turn, only adds to their debt. The situation can only change with the help of the federal government. Obama has, without much success, offered proposals to change the system, which would make making repayments easier. Unfortunately, government loans and subsidies would not be a great improvement because universities and colleges would raise their tuition. The looming possibility of interest rising from 3.4 to 6.8 percent would increase the student debt dramatically. More problems arise when indebted students become taxpayers and risk the possibility of failing to qualify for mortgages. This problem subsequently extends to the housing market as young adults make up the majority of first-time home buyers. The long term impact of the rising student debt is a negative effect on the nation’s economy.
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4/19/2012 02:39:17 pm
The article "Recovery Threatened by Runaway Student Loan Debt" by Tom Raum details the student loan program run through the government, and how the increasing amount of debt will have negative effects on the economy as a whole. The problem described in this article is that as the price on a college education, so does the amount of debt accumulated by the government. The job market is down, making it difficult for students to find jobs after graduation. They are then forced into going back to school for higher degrees, hoping to increase their chances at finding a well paying job to repay their student loans. If the American people cannot start paying back their own educational debts, the burden will have to fall on the taxpayers as the economy as a whole is hesitant to improve. If the rates of tuition keep up this raising trend, the amount of student debt will follow the same pattern. Eventually the government will run out of money to supply students with financial aid. If the reduced federal rate expires, interest rates on these loans will increase, and make it even harder for current and future students to pay off loans. Keeping interest rates low will help students as they begin to catch up on their loans as they find jobs. Certain aspects of the system that are already in place can help fix this overwhelming debt facing the government such as withholding tax returns to people who haven't paid back government loans. This can help put a necessity on paying back the loans, above other less consequential things. If the government can't afford to give out student loans, less students will be able to attend college, and the country could end up producing a generation of undereducated global citizens. Students need loans, but the government needs to control how much they give and make sure they will be able to collect, for this government has enough debt to deal with as it is.
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Maddie Conover
4/19/2012 02:40:25 pm
Sorry, this is Maddie Conover, I don't know why it put my name and not my email on my response.
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Toby Bason
4/19/2012 03:59:11 pm
The article ,Recovery Threatened by Runaway Student Loan Debt, addresses the issue involving citizens not being able to pay their student loans. This problem is growing in our country because of the rise in prices for a college education thus causing people to borrow money from the government that becomes very difficult to pay back. The average college student does not find a job that pays well enough to be able to support themselves comfortably and pay off their student loan, and the issue at hand seems like it may carry on for a while. One solution may be lowering college tuition fees, this way the student can still take out a loan but not be in such a great debt when they exit college and be able to pay back their loans with much more ease. In the long term, more and more students will fall into debt and the average Americans taxes will keep raising to substitute for the governments loss, which will only bring our economy further down.
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Lupita Alcantar
4/19/2012 04:25:58 pm
In the article, "Recovery threatened by Runaway student loan debt," Tom Raum highlights that student loans are run by the federal government and are becoming more and more expensive as the years pass by. The problem is this because the jobs are the ones who are harder to find after college. The reason this is happening is because the students are the ones who are borrowing loans in order for them to get an education. But in this case for some, after college there's no job for them and it's difficult to pay off their loans. As I see this problem increasing it will get worse because since the graduated students can't find a job they go back into school to get a higher degree. All they are doing is giving themselves more debts to then pay off. But how? There could be a solution to all this mess, because now the tuition fees at universities are increasing and admission status are retaining themselves of who gets accepted or denied. The government is in control and would be able to work things out. The long-term impact is being along the way of our economy getting worse and worse. Who knows what could happen next?
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Tyler Anthony
4/19/2012 05:24:41 pm
With the economy the way its been, paying off any types of loans have been difficult for many people. Most college students and parents are having the hardest time paying off student loans.The problem in this article is there has been a lot of debt building up from these loans reaching up to $1 trillion. It also doesnt help the situation with failed attempts to fine tune the system from President Obama. Whats going on can affect many highschool graduates that need some sort of aid in order to reach the goals they want to achieve.Its difficult to have many solutions with debt that high, but extending loans or more jobs opening up can help struggling college students.
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Lydia Erickson
4/20/2012 08:06:49 am
The limited job market is preventing college graduates from earning enough to sufficiently pay off their debt. The debt has reached around 1 trillion dollars and it doesn't look like there is hope of it getting better. It appears low on the list of priorities in the GOP presidential campaign. However, Obama is advocating for a more organized system allowing it to be an easier process. Some disagree with him, claiming that the government would be too involved or that tuition would go up too much. The problem with the situation, is that people won't have the opportunity for higher education. And "the next debt bomb for the US economy."
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Brian Begerow
4/29/2012 03:03:05 pm
Goof. In the article "Recovery Threatened by Runaway Student Loan Debt" by Tom Raum of the Associated Press, the issue is presented that student loan debts have risen to outrageous numbers and may have a deep impact on the American economy. The debt has surpassed the one trillion dollar mark and is now the leading type of debt in the United States. This problem is happening for a few reasons. The cost of tuition and enrollment and schools has sky rocketed recently, rising even faster than the inflation rate. Students who before hand would have struggled to pay back their debts, now find themselves in even tougher situations with more to pay off. Another contributing factor to the situation is the unemployment situation in the country. With the jobs market still struggling, many students find it difficult to find jobs to pay off their debts, which has undermined the founding ideology behind the federal student loan program. According to economists, the problem is only going to get worse. One claims that the situation is showing signs similar to that of the mortgage problems a few years ago. If measures aren't taken to stop it, the problem will continue to compound upon itself because of the increasing school prices and poor job availability which don't seem to be showing any promise of change at the moment. One solution is to allow more government control in order to lower interest rates on the loans and to lower the tuition of public universities. If something similar isn't done, than the already indebted nation will find itself in an even tougher situation than before.
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