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Cause And Effect Essay On Student Debt

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Outstanding student debt increased $31 billion the past year to $1.31 trillion. Over 9.7 million students borrow annually. Student loan delinquencies are over 11% and increasing, according to New York Fed President William Dudley. College costs skyrocket above inflation; financial aid fails to increase proportionally. Many of today’s students do not understand the long term impact of financing college. For example, students with significant student debt are unlikely to own a house at any age. Some retire with student debt.
Student debt is the second largest consumer debt, next to mortgage debt, OIEA suggests you:
• Understand your student loans (if applicable): The average student in the class of 2016 had over $37,000 in student loan debt. In choosing loans, understand if repayment plans are set or income-driven and any repayment penalties. Private loans typically are not income-driven so may not be the best option if you plan to go to graduate school. Make a list of your loans with minimum monthly payment amounts, interest rates and terms so you can ensure on time payment and prioritize loans for early repayment. Learn more with Consumer Financial Protection Bureau’s paying for College web tool.
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Then, consider you income and create a budget that incorporates, as warranted, asset use, to minimize expenses and student loans. You do not need to accept all loans offered. Only accept enough to cover expenses not covered by family, existing usable assets or scholarships.
• Learn finance basics: Study the fundamentals of savings and investing including budgeting, stocks, bonds, mutual funds, 401(k)s, IRAs, and the principles of asset

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