Student Debt Essays

Introduction for Essay

Aaron Sandy- Hewitt Economics – 02 December 7, 2018, Unethical high student tuition and how it affects the economy Every year, the tuition for universities increases, making it harder for many to succeed. Over the past recent years, the amount owed in student loan debt increased constantly every year. According to recent research by big think, “ the average 22-year-old graduate starts off $23,000 in the hole.” Starting off at a job with a minimum wage and having $23,000 in debt makes it hard for college graduates to be able to repay their loans.

Research Paper on Student Debt

With recent graduates being forced to pay off large college fees, this causes many changes in the economy as spending habits change over time. A lot of the private universities inflate their tuitions which in turn forces young adolescents to make financial decisions of a lot of money at a young age.

Thesis Statement for Student Debt

The reason many young adolescents end up taking out large loans at expensive universities is to get a good-paying job in order to repay loans. Also, one would expect to be financially secure because of their prestigious degree. Unfortunately, many college students do not realize that most prestigious jobs nowadays prefer individuals with experience rather than just a degree.

Argumentative Essay Examples on Student Debt

The saying that college students need to go to a prestigious school in order to get high-paying jobs is a myth misunderstood by many. As many college students continue to believe this myth, colleges are unfortunately taking advantage of this as much as possible. For example, at Columbia University, the tuition a student is required to pay to attend each year without financial aid is $66,383. After four years at the university, individuals would be repaying $265,532 in student loan debt. A prestigious degree can put you in a better position to get an interview, but is it really worth it to invest over $200,000 in a college education? Most graduates from Columbia have a starting salary of approximately $59,300. According to Seven Pillars Institute, “Americans owe nearly $1.3 trillion in student loan debt spread out among 43 million borrowers.”.

Titles: Government Interventions and Their Impact

A country having many individuals in debt and low-income starting wages for most only causes the debt to increase every year. As the debt of a country goes up, the aggregate demand will decrease as consumers have less money to spend. The government is responsible for protecting individuals and preventing the debt from increasing significantly every year. In order to combat this, the government gives out grants and aid to help combat rising tuition. However, this has not helped the problem. The rate of tuition is rising soo fast that back in the early 1980s, pell grants used to cover more than half of a student’s tuition.

Today, it is not that way; they cover less than a third of tuition. Forbes reported that the new federal grants and aid do not help the situation but instead make it worse. They stated that private institutions and universities try to take as much federal money as they can, so they continuously raise the tuition. This is why the Pell Grant percentage went from covering more than 50 percent to only covering less than a third of tuition. Simply stated, the government has failed to prevent the problem; it’s only getting worse each year. Another cause of the crisis is that working wages have been declining over the years, and the necessity of getting a college degree increases.

As this cycle continues, the number of families that would be able to repay student loans will decrease. There would be less money circulating in the economy as the money spent on repaying loans year to year increases. Seven Pillars Institute continues to elaborate, saying another part of the problem is for-profit colleges, “the amount of debt owed by those attending for-profit colleges has grown from $39 billion in 2000 to $229 billion”.

Ideas: The Impact on Lifestyle and Living Standards: Unpacking the Real Cost of Student Debt

In order to attract new students, these for-profit universities inflate their rates on graduation and also job placement. This, in turn, attracts many students with high numbers. This is very unethical, and a bit on the illegal side as well because the number advertised is not as factual as they make it seem. Multiple studies being conducted, according to the national bureau of economic research, suggest that “applicants with business bachelor’s degrees from large online for-profit institutions are about 22 percent less likely to hear back from employers than applicants with similar degrees from nonselective public schools.”(US News)

This is very alarming because students that do not have enough capital and instead take out loans to attend for-profit colleges. They apply and attend these colleges, but the research shows that it is not necessarily the best decision. These colleges are using unethical ways of inflating their numbers which causes students to be deceived by this. Many students are being misled, which adds up in the long term. This can cause many students to default on their loans, causing interest to go up continuously. For-profit universities advertise mainly to attract older individuals; the older the individual, the more they are now able to borrow from the bank.

This, in turn, makes them end up not being able to pay for their interest on the loans taken out. Remember that these students are working on low salaries as well. It is a snowball effect that if nothing is done about it early, more individuals are going to be in unpayable debt. This problem is a lot bigger than most individuals think. Financial illiteracy is a developing problem which is the main cause of why many college students are being taken advantage of. When surveyed, many students said that they took out loans without looking at whether someone with that degree could repay their loans or not. It is very easy for one to take out a student loan as the government offers fafsa to give students the ability to borrow more. This is not helping the problem; instead, it encourages it. If something is not done about the financial literacy of college students, then there will be long-term negative effects on the economy. On average, the cost per borrower on a student loan is $351 after graduation.


However, the mean payment is around $203. There are other bills such as utilities, food, transportation, and the like that have to be paid in order for individuals to supply themselves with necessities in life. If these bills are not paid, these graduates will not be able to live comfortably. If the rent is not paid, individuals will not have a house to reside in, and if the utility bills are not paid, then there will not be any electricity or water. Also, if car payments are not paid, then the chances of repossession increase which would leave graduates without a mode of transportation. With this controversy, it forces graduates to prioritize their bills.

The only thing that would be at risk is bad credit. Having bad credit is less bad than being homeless with good credit. To help improve the increasing problem of high school tuition contributing to high unpayable student loan debt, President Obama passed legislation called the pay-as-you-earn repayment plan. With many restrictions, however, this has caused the References Student debt increase, which causes college students to spend less, causing college graduates with large loans and little salary to spend less. This problem can be fixed by One of the main causes of college graduates’ Change of lifestyle.

Unethical high student tuition and how it affects the economy 1. Name and give a brief historical background of the event or incident chosen 2. Describe the nature of the unethical activities involved with a particular party, and explain their effects or damage to the community and society. 3. Show a critical understanding of the concepts, theories, and methods of economics as a social science by analyzing the effects of unethical activities on the well-being of society and the economy. 4. Conclude by proposing strategies that can help prevent more of this type of unethical incidents from happening. A satisfactory demonstration of this outcome will  

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