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Student Loans and Financial Stress Essay

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Updated: Jul 12th, 2021

One of the remarkable peculiarities of modern American society is the understanding of the value of higher education. Americans now strive for obtaining a degree that is supposed to ensure better employment prospects. Student loans have become an opportunity for thousands of people, but the cost of the chance to succeed in life is becoming rather unbearable for many. According to Bloomberg (2018), federal student loans reached $1.4 trillion in 2018, which is the second-largest debt segment (after mortgage). It is noteworthy that this kind of debt is a more serious burden for underprivileged groups due to their families’ financial background as well as inequity in the labor market (Addo, Houle, & Simon, 2016). It appears that student loans that are aimed at providing wider access to all are contributing to the inequality existing in the USA. Governmental agencies can and should address this problem, but their effort should go hand in hand with personal responsibility and more intense involvement of educators.

It should be noted that student loans did not emerge in the 21st century. This opportunity was available as far back as the 1960s (Popp Berman & Stivers, 2016). However, the amount of borrowed money was significantly smaller as students tended to work (especially in the summertime) and could cover a larger part of their academic expenses. Another factor that led to an unprecedented increase in student loans was the rising tuition costs (Bloomberg, 2018). The funding provided by state and local governments has been decreasing exponentially, which forced educational establishments to raise their fees. For instance, the governmental funding of postsecondary education was almost 60% in the late 1970s while it was not even 40% in 2012 (Britt, Ammerman, Barrett, & Jones, 2017). The government also used to play a more significant role in regulating financial aspects related to postsecondary education.

At present, students often face numerous challenges including the need to pay considerable sums, low access to detailed information concerning their rights and available opportunities, as well as inappropriate methods used by various collection agencies. Of course, it is a beautiful dream to ensure that every American can receive higher education, but it is hardly attainable. Therefore, the cost of a degree should be divided among the primary stakeholders. The government should increase the funding of postsecondary education and try to provide wider access to educational services (Ionescu & Simpson, 2016). Educational establishments can also try to reduce or, at least, keep their fees unchanged, which can be achieved with the help of cooperation with non-governmental organizations, various institutions, state and local authorities, and private-owned businesses.

In conclusion, it is necessary to state that the government should start playing a more active role in the process and regulate the financial aspect related to higher education. However, students should also be more responsible and ensure they can pay the loans they lend. Young people should also be hard-working and make sure they complete the courses they enroll. Finally, students should try to find opportunities to pay their debts by working during the summer. Educational establishments can and should assist students in their endeavors by providing detailed information regarding all the aspects and opportunities, as well as hazards, associated with higher education and student loans. It is critical to make sure that all stakeholders contribute to the development of the educational system that enhances social equality and helps the nation to prosper.


Addo, F. R., Houle, J. N., & Simon, D. (2016). Young, black, and (still) in the red: Parental wealth, race, and student loan debt. Race and Social Problems, 8(1), 64-76. Web.

Bloomberg. (2018). Fortune. Web.

Britt, S. L., Ammerman, D. A., Barrett, S. F., & Jones, S. (2017). Student loans, financial stress, and college student retention. Journal of Student Financial Aid, 47(1), 25-37.

Ionescu, F., & Simpson, N. (2016). Default risk and private student loans: Implications for higher education policies. Journal of Economic Dynamics and Control, 64, 119-147. Web.

Popp Berman, E., & Stivers, A. (2016). Student loans as a pressure on U.S. higher education. Research in the Sociology of Organizations, 46, 129-160.

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