By Ashleigh Nagle and Kabeke Mukari
Students and parents struggle to pay college or university tuition out of pocket because of the high price. They use different options like either private or federal loans based on their income. People with student loans have more challenges to repay them. Anxiety, stress, and frustration are building up daily and solutions to the issue seem like a long nightmare. Some individuals decide to drop out of college, and others get to the extent of filing bankruptcy. Different banks have been suggesting options to alleviate the financial burden that haunts people, but the issue has deeper roots than just a payment plan or a low-interest rate. According to the Ohio University website published in July 2022, around 1.8 trillion dollars are registered as student debts in the U.S. which affects approximately 47 percent of the American population.
“Private student loans are educational loans offered by private lenders like banks, credit unions and online lenders,” said the Bankrate.com website. The website added that private loan lenders do not offer income-based repayment or debt relief plan.
According to a CNBC article, 92% of borrowers have federal student loans. It said, however, that private student loans make up 7.71% of the $1.75 trillion total outstanding student loans in the United States. The article showed that most student loan borrowers are federal, but private student loan borrowers still make up a huge part of outstanding student loan debt. Federal student loans are not the only loans that have a huge factor in student debt.
In an article by Forbes, they stated that $131 billion dollars is the total amount of debt owed by students across the country. Also, 89% of the private student loan debt is owed by students with undergraduate degrees. Graduate school students owe 11%.
Forbes breaks down how much private student debt there is among all college students. The data shows that in the United States, most students who make up private loans are undergraduate students. This is important data moving forward because it can help incoming college students and how they want to choose their payment method.
Sarah Selby, a program specialist from the Towson University Financial Aid office, stated that TU does not offer private student loan relief or payment plans because loan lenders are the ones who offer any form of repayment.
The student debt crisis has been the subject of many discussions and debates among students, politicians, non-profit organizations, journalists, and much more, said the Ohio University website. Senator Elizabeth Warren along with Senator James Clyburn brought to the Senate in 2020 a proposal in which students or individuals who earn less than $100,000 should receive a loan forgiveness of up to $50.000, according to the same website. Both senators said that the money would come from a special tax taken from the wealthiest Americans. On the other hand, Senator Bernie Sanders suggested a total student loan cancellation for every borrower.
While politicians are debating various methods of student debt relief, some individuals still struggle to pay the loan and wish for free college to avoid any form of anxiety and stress.
“I think debt relief is great,” said Marjorie Adams, a Towson University alum. She added that it would help students, parents, and alumni to be more productive in their life and career. Adams noted that she paid off the loan after 10 years because of her business.
Selected Sources
- The Student Debt Crisis: Stories, Statistics, and Solutions | Ohio University
- Pros And Cons Of Private Student Loans | Bankrate
- Will Private Student Loans Be Forgiven? What you need to know (cnbc.com)
- 2023 Student Loan Debt Statistics: Average Student Loan Debt – Forbes Advisor
- The Student Debt Crisis: Stories, Statistics, and Solutions | Ohio University
- Student Debt Stories | Student Debt Crisis Center (SDCC)
- The Rolling Jubilee Has Ingenius Plan to Canel Personal Debt
- Shared Harvest Creates Opportunities For People to Pay Off Student Debt By Volunteering (sharedharvestfund.org)