“What’s full of new experiences, ups your education, and puts millions of kids in debt? College. What started out as a way to receive more knowledge is now leaving over 44 million Americans in debt.”
What’s full of new experiences, ups your education, and puts millions of kids in debt? College. What started out as a way to receive more knowledge is now leaving over 44 million Americans in debt. This is why so many young Americans are fighting for a different system. Most of the time, college leaves you with debt, and the only way to pay it off is through suspicious student loan organizations. Other times, you can apply for student forgiveness, but the odds are next to none. Others argue that loans can help establish and build your credit score. Here, I will be telling you why you should reconsider before taking out a student loan.
Most days, it’s common for students to take out loans for college, which leaves them in debt. The problem with taking money from the student loan organizations is that some organizations try to scam you. There are numerous lenders that abuse their power, giving little information out to students and scamming them. According to the New York Times, in recent months, the student loan giant Navient, which was spun off from Sallie Mae in 2014 and has retained nearly all of the company’s loan portfolio, has come under fire for aggressive and sloppy loan collection practices, which have led to a set of lawsuit governments filed in January. A specific example is when a woman (Ms. Hardin) who was taking out a loan for college realized that her company never told her that “she had taken out high-risk private loans in pursuit of a low-paying career. But her lender, SLM Corporation, better known as Sallie Mae, knew all of that” (Loans ‘Designed to Fail’: States Say Navient Preyed on NYT, Stacy Cowley and Jessica Silver-Greenberg, 9/4/17), Ms.Hardin is not the only student who felt like this. Many students feel like student loan organizations are preying on young Americans who are unsure with how much they’re paying.
College debt should be an easy solution to fix, but sometimes it can get the best of students. Many Americans are now turning to student forgiveness programs. Student loan forgiveness allows the student to postpone the payment as long as they perform a service for the community (public service). If the student also has all the requirements done with, then he or she will be eligible to have the chance to have an income-driven replacement plan. This income replacement plan will help out the monthly student loan payment at a more reasonable price corresponding to the person’s current income situation. Or, if you have been constantly paying on time payment for 20 years, you get the rest of your student loans forgiven completely. The problem with this is that 99.5% of people who applied for public service loan forgiveness have been rejected. According to CNBC News, about 30,000 people applied for student loans forgiveness, but only 96 people got accepted. Instead of wasting your time of trying to be accepted in student forgiveness, many should consider a grant or applying for a scholarship. Your chances are 19%… always better than the less than 1% you get from student loan forgiveness. Grants and scholarships are financial aid that don’t have to be repaid unlike student loans.
While college debt can be damaging and scary for the future of the new generation and millennials, many people argue that student loans are helpful to students who just want an education, and that they help you take education more seriously since it comes at such a high cost. They state student loan forgiveness can also help. Kevin Maler was one of these fortunate 96 people that got accepted. He mentions how lucky he feels being a part of the less than one percent to get accepted. He had to have at least 10 years of on-time payments to qualify. Most people are stunned when they hear this small percentage of people who get accepted. People like Shannon Insler, who also had to deal with student loans, had a different point of view than most. She argued that college was an investment. Even while stating this, she said, “I’d be lying if I said I enjoy paying for my student loans. I’m facing a $50,000 price tag and a 20-year repayment plan. It hurts to think about other things I could do with $50,000.’’ This just goes to prove how the cons outweigh the pros. Other students like Miranda Mariquit already had a scholarship, but chose to use student loans for some extra money. According to Student Loan Hero, Miranda referred to using loans even though she had a scholarship as her biggest mistake, saying that it ruined her cash flow and it made her debt-to-income ratio look sketchy.
In conclusion, if you don’t want to end up like the 70% of college kids who are in debt right now, you should make sure to really consider applying for grants and scholarships. You’ll have a higher chance than working in public service and having 10 years on income payments just to play for a loan forgiveness that only 1% of people get accepted into.