Daily VideoMay 31, 2012
Why Is There So Much Student Loan Debt?
Student loan debt in the U.S. has reached more than $1 trillion, and more and more potential college students are wondering whether the investment is worth it. Many economists say it is still worth going to college in the long run, but many of today’s students may never pay off their debts with the amount of money they make.
Although there are ways to put off making student loan payments until the borrower has enough income, the interest on the loan continues to accumulate, even when payments aren’t being made. Experts say defaulting on student loans is a terrible thing for borrowers, negatively affecting their credit and wages for years.
Some advocacy groups say the U.S. education model is flawed and needs to be re-examined, because students spend a lot of money obtaining a prerequisite for a job but can never earn enough to pay that back.
“You go into massive amounts of debt just to get an education that you need as a prerequisite to get a job, and then spend the rest your life paying off that educational debt. There’s got to be a better way.” – Robert Applebaum, ForgiveStudentLoanDebt.com
“The massive inflation we see in tuition, in college prices, have gone up faster than health care, faster than almost any other major industry. Well, that’s a product in large part of federal student aid. If you give someone $100, you tell them they have to use it for college, and colleges know they have it, of course they’re going to raise their prices.” – Neal McCluskey, Cato Institute
Warm Up Questions
1. What is debt?
2. What is credit?
3. Why do people go to college?
1. Based on what you heard in the video, do you think going to college is still worth it, despite the debt?
2. Why did one economist make the argument that federal student aid is driving up the cost of college?
3. What are your future plans? Will you need to go to college to achieve them? If so, how do you plan to pay for it?
Tooltip of related stories
Tooltip of more video block
Submit Your Student Voice
Residents of Ferguson, Missouri, have urged for peace in their town following weeks of protests over the killing of an unarmed teen by a police officer. Continue reading
A new side effect of climate change has appeared in Siberia, where mysterious, giant holes the size of football fields have opened in the ground. Continue reading
There was new unrest in Ferguson, Missouri yesterday, after police shot and killed a robbery suspect in nearby St. Louis who reportedly threatened them with a knife. Continue reading
More than 1.5 million Iraqis have fled their homes due to threats from a militant Islamic group that is seeking to overthrow the government. Continue reading
The shooting of unarmed teenager Michael Brown by a white police officer in Ferguson, Missouri, has spurred over a week of protests and thrown the question of police diversity into the spotlight. Continue reading