preview

Problem And Solution: Student Loan Debt

Good Essays
Problem/Solution: Student Loan Debt Student loans are a common way to fund education, especially for college students. Loans provide educational opportunities that students may not be able to afford during their college career. The majority of college students have received some type of student loan, and the average balance of those loans for undergrads was $25,900, according to data from the National Center for Education Statistics. For many young adults, exiting their college with a large amount of debt can make their life really long and that can led to many problems. A lot of students don 't know what the life is after college. What they don 't know can hurt them in the future. A study has found that 33 percent of students don 't…show more content…
First problem that students can face when they take loans is high interest rates. Many students didn 't understand what their interest rates before they sign any papers. All they did is sign all the papers that needed to be signed with out questioning how the interest rates will work. For graduated students, the interest rate can go from 6 percent up to 10 percent it, depending on the credit score. If we count that percentage, that 's a lot of extra money that students have to pay. For example, my friend took a loan to pay off his college tuition. The amount of loan was $32,000 and the interest rate was 6.38 percent. After he did the calculation, he found out the he was paying 5.60 per day just for interest. It sounds crazy, but that 's how interest rate works for students. In addition, this rate can go up if we try to extend the years of paying. That is the problem with the high interest rates where students take loans and don 't know how much extra they are paying. " For example, if you took out a 15-year, $50,000 loan, and a 2% jump from 5% to 7% interest could cost you almost $10,000 in pure interest"(Credible staff). As you can see how debt is more common for college students. Also it is critical that how much student loan interest rate can affect the total payment over the life. Unfortunately, they don 't know anything of that A lot of people don 't think that it will be that much, but when they calculate the find out that the interest is too much. Another problem that can face the students when the have debts is stress. Just as Lim says in her article "Recent national surveys show that college student 's debt and other related financial situations are one of the leading causes of stress." After they graduate from college, they start to think about how much they need to make every month in order to pay off their loans. Here where the stress start to begin. They get really stressful and don 't know
Get Access