Introduction
Are student loan debts a blessing to have access to education or a curse for their future career? Students in the United States face a variety of obstacles when paying for their college education. About 45 million American students altogether owe $1.7 trillion in debt (Abigail, 2019). Loans are believed to hold the economy back and stagnate business growth and consumer spending. That is why is it essential to investigate what are the consequences of student loans. It is known that wealthy families tend to help their children with education payments as it becomes tough to manage the substantial prices in the United States. Individuals that have their education paid for by family members are in common more successful in future careers. The Georgetown study proved that to reach high goals in the US, it is easier to be born in a rich family than to be solely smart (Abigail, 2019). It turns out that student loans are stagnating the economy of the country, slowing down the progress of individuals in their careers, and significantly impacting the structure of the U.S. society.
Overview
First, I will discuss the impact of the student loan on the economy of the country. Then, I will explain how large loans influence student’s future career and performance. Lastly, I will disclose the separation of the U.S. society because of the continuously increasing student loans.
Development
Student debts significantly impact the economy of the United States by stagnating the business growth, limiting the spending of the students, and stressing the system of social programs. Consumer spending directly depends on their financial state. The research has shown that students with high debts are 36% less likely to purchase a house (Hanson, 2022). Regarding business growth, students with entrepreneur qualities do not risk starting a business whilst having a debt. Financial issues make those with loans rely on the social programs sector. For example, 24% of Medicaid users have a postsecondary degree (Hanson, 2022). Moreover, generational inequality caused by yearly increased costs on education leads to the decrease of GDP and shortage of investment from young individuals.
A student’s career is indirectly defined by the amount of debt they have after their education. The fear of high costs of education prevents talented students from entering college, especially if they come from low-income families. Student debt burden makes young individuals seek part-time jobs to manage their expenses and keep paying the debt. Working whilst studying deteriorates the quality of education and puts students under a bigger pressure.
Unequal access to education because of large loans divides the society of the United States into segments and prevents talented individuals from getting high education. Students from low-income families that have no financial support take educational loans and soon drop them because of difficulties paying. This prevents people with good potential to reach high standards in society: employment, salary, and the ability to purchase properties. The society of the United States keeps being strictly divided as the background decides the future performance and development of these motivated scholars.
Conclusion
Thus, the student debt in the U.S. structure drastically impacts the economy by limiting the spending of financially poor young individuals, deteriorating business development, and increasing the number of people using social programs. These aspects inevitably lead to a shortened investment of student equity into the country’s economy and a decrease in GDP. The issue impacts the future performance and success of educators as they tend to drop loans with a fear of not managing to pay them fully. Having no financial support from family limits talented individuals from getting high education. The latter causes a strict separation in the society of the United States as people from low-income families have fewer chances of getting highly paid jobs. On the contrary, children from affluent backgrounds have large opportunities to succeed in their careers.
References
Abigail, J. H. (2019). Georgetown study: ‘To succeed in America, it’s better to be born rich than smart’.CNBC Make It. Web.
Hanson, M. (2022). Economic effects of student loan debt.Education Data. Web.