Student loans and the united states economy

The paper also focuses on looking into the possible solutions for this riddle related to student loans and debts and the most effective and sustainable policies that the federal government together with the policymakers can implement to come up with the most appropriate repayment programs that are favorable to the borrowers and that can allow for their financial growth and independence. Introduction It is the dream of every student to attain the highest academic excellence as a security for a brighter future and tertiary education is a major component in attaining this excellence. However, this dream is often faced by many financial challenges and constraints for most students, especially those from humble backgrounds belonging to low and moderate-income households. Therefore, most of these students are forced to rely on student loans disbursed directly from the US Department of education and other funding from private lenders in order to finance their education.

Student loans have recorded significant increase of use by college students in the United States who mostly use it to pay for their tuition fee and other expenses and they are provided by the federal government through a structured policy. According to McKinney and Andrea (2015), the loan repayment programs are significantly associated with complications that impair the student’s decisions of the repayment process. Furthermore, the level of the student’s debt may influence their career choices where in some cases, most of them may decide to avoid careers related to public services and instead seek for opportunities in private sectors. Student loans repayment programs are considerably expensive for most fresh graduates from higher learning institutions thus their participation in such programs has been found to cause significant economic burdens to them which in turn may influence their consumer decisions.

For instance, students are entitled to large monthly repayment programs for decades which tend to delay major purchases including a house or a car and for some students, acquiring the basic purchases may be a challenge too. These huge student loan debts resulting from interests may pose long-term consequences such as making decisions to postpone starting families or even marrying. Policymakers should also consider partnerships with states in advancing the affordability of college education by initiating programs that are equity driven for colleges. Secondly, student loans have been shown to result in college dropouts where some students decide to forego their college education due to high accumulations of loans debts. According to Russell (2018), some students opt out college education since they are afraid of accumulating the huge loan debts.

Therefore, the federal government should consider forgiving of payment of the student loans especially for those students unable to complete their college education. For instance, the federal government, through Congress can avail more effective and sustainable debt relief by reinforcing and targeting loan forgiveness programs and repayment programs based on the income level of the borrowers. (2016, July 29). Is a Student Loan Crisis on the Horizon? Retrieved from https://www. brookings. edu/research/is-a-student-loan-crisis-on-the-horizon/ Chatterjee, Satyajit, & Felicia, I. "Ensuring student loans against the financial risk of failing to complete college.  Journal of Economic Surveys, 29(4), 614-636. doi:10. 1111/joes. 12124 Frizell, & Sam. "Student loans are ruining your Life. , & Burridge, A.  B. Helping or Hindering? The Effects of Loans on Community College Student Persistence.  Research in Higher Education, 56(4), 299-324.