Kamath 1 Nikita Kamath SBS Eng Comp 1 80569 25 September 2013 College Student Loans College students are

buried in student loans in the hope of receiving a degree that will enable them to acquire a high paying job. I know of many students here at FGCU, who are borrowing thousands of dollars this semester in loans to pay for their books and dormitory expenses. Since 2001-02, the amount of student financial aid to undergraduates in form of loans has increased faster than grants (The College Board, 2006). Young adults owe money equivalent to a mortgage loan to the government, having to make payments for the rest of their lives. Well, that makes me wonder, Is taking loans as a young college student a wise decision? Loans have become a prevalent way to finance education in recent years, so I started researching about why students borrow for college education. Laura Perna who conducted a research in Understanding High School Students Willingness to Borrow to Pay College Prices states, students perceive that loans are necessary to share the burden of paying for college. Their willingness to borrow is related directly to the expected benefits and costs. Although they prefer other forms of aid, they feel loans are inevitable to be able to attend college. The perception varies depending on the students knowledge of loans, their cultural background, and socioeconomic level. The message that parents, counselors and teachers send to students about loans also plays a significant role in their borrowing pattern. In other words, loans have become a very acceptable means to pay for education. From early on students are spending more than what they can earn or afford. For instance, my roommate recently applied for a loan because she

Kamath 2 didnt have enough money to pay for her books and meal plan. Although students think of loans as easy money, do they realize that they will be paying back twice as much as they borrowed by the end of it? That led me to think about the greater impact of this issue on the economy and our future. During my search I came upon an article by Allie Baldwell Rising Student-Loan Debt Hinders Spending and Hurts the Economy, Report Says , which states that according to Consumer Financial Protection Bureau, the student loan borrowers owe the federal government more than one trillion dollar in loans. She rightfully was concerned about the significant economic impact these loans can have on the future of this nation, as it diminishes the buying power of the future generations. Students should not simply be advised that the benefits of loans will always exceed the costs of loans. Perna had suggested that school counselors should consider several factors while advising students about acquiring loans (2007). Recommendation for loans should be individualized due to the differences in academic preparation and other factors as many young students cannot complete the rigor of college education due to their lack of academic preparation. They drop out of college and are unable to obtain jobs with earnings that enable them to repay their loans (Gladieux and Perna, 2005). According to Consumer Bureau, the salaries for college graduates have not increased at the same rate as the student loan debts (Baldwell, 2013). In what Baldwell calls a domino effect our generation is left with less borrowing power for homes, cars and also less money in retirement for our future. This has become a source of anxiety, depression and health problems for many people, who have to choose between groceries and making their loan payment. So then, what are my options besides high interest loans to acquire a decent education? According to William Elliott, You pay your share, well pay our share: The college cost

Kamath 3 burden and the role of race, income, and college assets, the federal government has found many solutions to the equal access problem caused by high college costs through the adoption of policies that make college loans accessible to more students. They are making grants and scholarships available for low income groups. Some bright students can get merit scholarships and can apply for merit based awards. An article by Kelly Sheehy Pay for College Without Taking on Student Loan Debt, talks of different options that were worthy of considering. She offers example of students who used non-conventional means to pay for college. A young man worked multiple jobs from taco-bell to tutoring to pay for his education. So he can be debt-free when he finished college. Other college students worked for companies that pay tuition assistance such as Target, Publix and other large companies. Some chose to enlist in the military to serve their country and also earn a free ride to college after serving for 5 years. As Elliott points out students may have to rethink their choice of their dream school based on its cost. As Sheehy rightfully states, College choice can play an important role in achieving a debt-free education, too. My high school friend, Sara, decides to go to an in-state school as it was cheaper than going to an out of state university. After comparing the scholarship amounts for out-of state university and the fees, she realized that out-of state education was far more expensive and not worth it. Maybe instead of raising the amount of individual Federal Stafford loans, the government should empower students with work study programs, and paid internships to reduce the burden of being indebted for a life time. I feel counselors should offer better advice to young adults so they can avoid greater financial crisis later in life. May be we should rethink and weigh the benefits of college education. What are the other options for those who feel that college is not for them? How will they make it happen in this world? Obviously, some will pursue trade school and associate degrees so they can join the

Kamath 4 work force sooner for slightly lower salaries. According to an interesting commentary Do you really have to go to college, by Mr. Stephen, students are making plans to engage in selfdirected learning. So what is self-directed learning? These are students who have chosen to learn practical skills from mentors through interning, apprenticing, traveling and volunteering. They acquire knowledge from the free resources that are available on the internet. Mr. Stephens says, Its fluid, its flexible and its education is designed for the students. I find his thoughts very intriguing and interesting, but not sure if it will apply in all cases, given the push for formal degree in jobs. After looking at different issues related to loans, I really think students should make informed decision about borrowing and the education that they are receiving. They have to ask themselves, if the college degree they are acquiring is worth the money they are spending. They may have to look further and explore options before they decide to apply for a loan. I think parents should encourage a habit of saving money, teach money management, so students realize that taking loans is a huge decision. I feel that our government and schools should offer more work study options, apprentice programs for students to acquire work experience while in school. Our politicians and educators should restructure this system, to make education affordable, so students can reach their highest potential without the burden of loans.

Kamath 5 Works Cited Elliott, William. "You pay your share, well pay our share: The college cost burden and the role of race, income, and college assets." Economic in Education Review 33: 134-53. "You pay your share, we'll pay our share": The college cost burden and the role of race, income, and college assets. Apr. 2013. 26 Sept. 2013 <http://www.sciencedirect.com/science/article/pii/S0272775712001355>. "Government." The Chronicle of Higher Education. 24 Sept. 2013. <http://chronicle.com/article/Rising-Student-Loan-Debt-Hurts/139141/>. Perna, Laura. "Understanding High School Students' Willingness." Research in Higher Education (2007): 589-606. http://repository.upenn.edu/cgi/viewcontent.cgi?article=1185&context=gse_pubs. 24 Sept. 2013. Sheehy, Kelsey. "Pay for College Without Taking on Student Loan Debt." US News. U.S.News & World Report, 10 Sept. 2013. Web. 11 Sept. 2013. Staff, NPR. "Young Adults Can Keep It Simple: Start Saving." NPR. Web. 11 Sept. 2013.

Stephens, Dale. "Do You Really Have to Go to College?" The Choice Do You Really Have to Go to College Comments. 26 Sept. 2013 <http://thechoice.blogs.nytimes.com/2013/03/07/do-you-really-have-to-go-to-college/>.

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