Education is one of the most essential tools that a person can acquire. It provides the skills and abilities to make one a reproductive person in society. In today’s workplaces, a college degree is seemingly required in most positions. Currently, many students depend on loans to finance their education. Some years ago, the federal government opened its student loan bank to profit-making institutions. As a result, student loans have become the worst type of debt that students have. A large number of students today have loans that in one way or the other, are not able to pay. Many of the graduates from colleges and universities do not have employment to enable them to repay the loans, and as a result, their loans continue to accumulate. Therefore, I believe that the government should take the initiative of ensuring that students learn comfortably without worrying about their loans. Measures such as student loan forgiveness, allowing bankruptcy, or eliminating private collection agencies from this process should be fostered.
Several politicians and people have campaigned for the forgiveness of students loans. Well, there are several reasons why student loans should be forgiven. First of all, the country is currently going through rough economic times. As a result, forgiveness of student loans would assist in increasing economic consumption by young people and improve economic growth. Forgiving all the student loan debt for the Americans will have an immediate stimulative impact on the economy. If this is done, millions of the Americans will definitely have hundreds or thousands of extra dollars in their pockets every time to spend on the ailing sectors of the economy (Pathman, 2014). Robert Applebaum argued that provision of a one-time bailout of the student loan debt which is presently valued at $1 trillion can help stimulate the economy that is seemingly still limping (Wear, 2016). The society actually depends on the college graduates to start businesses, buy cars and homes, and even invent new things. But with the debts that are on their shoulders, they may not be able to achieve such goals.
It is important to remind ourselves that students are normally promised that after acquiring the students’ loans and earning a degree, getting a job to enable them to pay off their debts would be easier and comfortable. However, after the economic crisis that the country faced, jobs were actually scarce, but if they are there, the wages are poor. The jobs available today are not paying well as it did to the previous generations (Loonin, 2016). Today, graduates are forced to have a dual income to live and pay off their loans. Leave alone being capable of affording a house, starting a business, or starting a family; most graduates are not capable of buying a car, going on vacation or buying a home. Many of them are forced to live with their parents or siblings or in a house with many people to get by. This is actually not what the graduates were promised.
At the same time, most of those who manage to secure employment or start a business are not able to save for their retirement. The extra money they earn goes directly to paying the loans, and this goes for so many years. If the debt is forgiven, it will enable the graduates to buy their homes, start their businesses, save for retirement, start their families, and even buy some of the basic items. This will open the door for hundreds of dollars to flow into the economy every month for investment in the ailing sectors (Usher, 2015).
The government can also consider allowing bankruptcy for student loans. It is no doubt that many borrowers across the United States are struggling and other countries across the globe. It is argued that student loans are the second consumer debt category behind mortgage. Some students struggle to repay their student loans. The students face undue hardships where they cannot be able to maintain a basic standard of living while repaying the student loans. The students also think that this situation would last throughout a long period of repayment time (Loonin, 2016). In most cases, you will find that students are trying to repay the loans, but they find it very difficult to take care of their families and even themselves while at the same time repaying the loans. In such a case, filing for a student loan bankruptcy will be the appropriate step to take. Making it easier for the students to discharge student debt could streamline the process of bankruptcy and assist borrowers in serious trouble to start rebuilding their lives. Statistics indicate that most students find the payment of the student loans so difficult because it imposes an undue hardship on you and your dependents (Loonin, 2016). And in most cases, debtor students cannot maintain, based on the current expenses and income, a minimal living standard for the debtor and the dependents if they are forced to repay the loans. Studies also indicate these state of affairs are likely to continue for a large portion of the repayment period. Even though the students are willing to repay the loans, they find it difficult to get money to repay the loans and cater to their needs and those of their families. Students who successfully prove their undue hardship should have their loans canceled.
At the same time, I believe the government should consider eliminating private collection agencies from this process. The use of private collection agencies is antithetical to the goals and aims of student aid. Some of us who have used student loans will confirm that the federal assistance provide financial aid to enable students to pursue post-secondary education irrespective of their financial situation. PCAs should be eliminated from the collection of student loans because loan servicers can fill the role of PCAs, the federal government is spending a lot of money on collections, and at the same time, the Department of Education is forced to overpay collectors to achieve a better outcome for the borrowers (Colleen, 2018). It is also important to note that the collection fees paid by the borrowers are not part of the money that PCA spend working their accounts. The Department of Education can work without involving the collection agencies but can depend on loan servicers to manage their accounts. Eliminating PCAs would free up millions of dollars that can be taken back into loan servicing to allow the government provides better services to the student borrowers. As a result, collection fees could significantly be reduced, if not eradicated, and the student borrowers will have more continuity in their repayment process. Loan repayment would, therefore, become simpler and reduce the number of borrowers who default and re-default (Colleen, 2018).
In conclusion, it is no doubt that student experience a lot of challenges in repaying their students loans. This is because of the lack of or limited employment opportunities in the market. Students experience a lot of difficulties trying to repay the loans. As a result, implementing the policies loan forgiveness, allowing bankruptcy for student loans, or eliminating the role of private collection agencies would remove the load that students have with regard to repayment of student loans. It is time for these policies to be implemented to help the struggling students achieve their life dreams.
Colleen Campbel (2018) Getting Private Collection Agencies Out of Federal Student Loans. Center for American Progress, Retried from https://www.americanprogress.org/issues/education-postsecondary/news/2018/01/24/445284/getting-private-collection-agencies-federal-student-loans/
Loonin, D. (2016) Student loan law: Collections, intercepts, deferments, discharges, repayment plans, and trade school abuses. Boston: National Consumer Law Center.
Pathman, D., et al. (2014) State scholarship, loan forgiveness, and related programs: the unheralded safety net.” JAMA 284.16: 2084-2092.
Usher, Alex (2015) Global Debt Patterns: An International Comparison of Student Loan Burdens and Repayment Conditions. Canadian Higher Education Report Series. Online Submission.
Wear S. (2016) Student Loans for Higher Education. Sacramento, California: California Research Bureau, California State Library, 2008.