Wed. Sep 18th, 2019

Ask Yourself, is accumulation student loan debt worth it?

Liban Mohamed

staff writer

Student Loans are becoming  more of a problem in the United States. Back in 2006, student loan debt was roughly $500 billion. One would think that $500 billion in debt is unbelievable, but now it is at a whopping 1.5 trillion dollars and counting. Over 44 million Americans have student loans. The average American with student loans is $30,000 dollars in the hole. Student loan debt is now greater than both auto loans and credit card debt.

What are the potential consequences of not paying your student loans? In some circumstances you could be arrested by the U.S. Marshals for not paying your loans. Why are student loans difficult to pay back? Previously, the government partnered with banks to help give lower interest loans to the students. When student loans were managed in that way, if the student defaulted the government would be responsible, not the banks.

This changed when a policy was made to cut out the banks who were acting as a middleman. Now the Department of Education directly gives out students loans. The intent was to cut out the banks, so the government wasn’t paying them the billions they were earning when they could do it themselves.

After the change, the Department of Education became the largest bank in the U.S. when it comes to loans. The Department of Education wasn’t meant to be a large bank, to handle management of the loans they outsourced to loan servicing companies. That’s where the big problem is. Students have reported that a few of the companies that the government outsourced to, such as a company named Navient, are taking advantage of students and have poor service overall. Navient has been accused of multiple crimes including overcharging active duty military members, damaging disabled borrowers credit, and many more.

            Many loan servicing companies provide poor services and tuition cost are skyrocketing. Many times the pricing is well out of budget for students. Unless you are pursuing a degree that can provide you with a well-paying career and job security, sometimes it may not be worth the debt accumulation.

Student Loans are becoming  more of a problem in the United States. Back in 2006, student loan debt was roughly $500 billion. One would think that $500 billion in debt is unbelievable, but now it is at a whopping 1.5 trillion dollars and counting. Over 44 million Americans have student loans. The average American with student loans is $30,000 dollars in the hole. Student loan debt is now greater than both auto loans and credit card debt.

What are the potential consequences of not paying your student loans? In some circumstances you could be arrested by the U.S. Marshals for not paying your loans. Why are student loans difficult to pay back? Previously, the government partnered with banks to help give lower interest loans to the students. When student loans were managed in that way, if the student defaulted the government would be responsible, not the banks.

This changed when a policy was made to cut out the banks who were acting as a middleman. Now the Department of Education directly gives out students loans. The intent was to cut out the banks, so the government wasn’t paying them the billions they were earning when they could do it themselves.

After the change, the Department of Education became the largest bank in the U.S. when it comes to loans. The Department of Education wasn’t meant to be a large bank, to handle management of the loans they outsourced to loan servicing companies. That’s where the big problem is. Students have reported that a few of the companies that the government outsourced to, such as a company named Navient, are taking advantage of students and have poor service overall. Navient has been accused of multiple crimes including overcharging active duty military members, damaging disabled borrowers credit, and many more.

            Many loan servicing companies provide poor services and tuition cost are skyrocketing. Many times the pricing is well out of budget for students. Unless you are pursuing a degree that can provide you with a well-paying career and job security, sometimes it may not be worth the debt accumulation.

Print Friendly, PDF & Email