Student Debt Essay

Student loan debt effects people that took out loans to pay for school. It puts them in debt that some may pay off in 10 years while for others it may take their whole life. A factor that affects debt is the type of loan graduated students take out. Federal and private student loans are the main ones people take out as though it goes deeper than that and separates into more loans. These loans are direct subsidized loans, direct unsubsidized loans, and direct PLUS loans which all have different interest rates that can be a factor in how much debt people can have. It effects the economy and people within the economy that have businesses. Business owners do not have enough money to pay their employees or supply the needs of their businesses because

1). It is hard for many college students to pay off their debt so they take loans out to help them but taking those loans out causes more debt because of their inability to pay the debt they already owe. Student loan debt can effect people through different types of loans like federal and private loans. Student loan debt also affects the economy. It effects the economy by reducing business growth, suppressing consumer spending, lowering credit scores, increasing interest rates, and making it more difficult to save for

There is an action taken to help with the student loan debt that keeps affecting graduated students and the economy. According to Bassaline (2022), “Recently, President Biden started considering an executive order to do a loan forgiveness of student debt under 10,000 dollars” (para. 7). The loan forgiveness would help decrease people’s debt that they owe. Bassaline (2022) also says, “Overall, it will cost the government $321 billion dollars. If we were to have a 10,000 debt forgiveness of student debt, it would mean more spending for consumers, and there would be a boost of entrepreneurship” (para. 7). Students would have less debt because of the $10,000 debt forgiveness and the economy would boom more because of people starting businesses or people investing more in their and others' businesses. The GDP would also be boosted to $17 - 21 billion dollars and it would boost jobs and the unemployment rate (Bassaline, 2022, para. 7). Another action being done to help people with their student loan debt is The Student Loan Fairness Act. The Student Loan Fairness Act would give borrowers a plan called the 10/10 loan repayment plan. The plan limits the payments on student loans to 10% of discretionary income. It also offers a maximum capitalization of 10% interest over the loan that was taken out. That means a student loan balance will never go past their original balance