Question

In class we discussed the concept of wage differentials. Historically, a correlation has existed between educational attainment and income level. Acquiring more education (human capital) has always been promoted as a means of escaping poverty. Unfortunately, due to rising college costs, students have taken on unprecedented levels of student loan debt. For this paper, you will research (with a minimum of three additional resources) the "student loan bubble" and proposed solutions to assist the impacted economic actors. The paper should address some of these main issues: Rising college costs and the reason for them. • Is a college degree still worth the investment? • What has been the trend in student loan debt over time? • What are the individual and societal consequences of excessive student loan debt? • What are some current proposals or programs aimed at solving the problem? • What are some counter-arguments against student debt forgiveness? • What responsibility should be borne by the borrower for the problem? • Should college be reformed and if so what a reform look like?

Answer 1

Education plays a very important role in shaping up the future of the students and also help them in developing as a responsible citizen. The colleges are the main center for getting higher education and it cannot be separated from the life of the students. Only school education is not sufficient for the career development of the students. But in some cases the cost of attaining the higher education is very high. Some sectors of the society are not able to pay the fee of the higher education and hence they have to opt for taking educational loans in order to accomplish their educational goals.

The educational loans have both pros and cons. The benefits of educational loans are:

1. The students can complete their education without thinking of the availability of the funds. If parents are unable to pay the fee the students can easily opt for the loans.

2. The students do not have to pay any amount during the completion of their course.

3. If the students feel like they can pay off the EMIs during their education.

4. Some banks provide loan to students at less interest rates.

But if there are benefits of educational loans, then there are some disadvantages too. These are:

1. The students can use the loan for the educational purpose only. They are restricted to education only.

2. The students are burdened with loan even before start of their career.

3. The credit score is also affected if the students remain unable to pay off the loan in the in the stipulated life which hampers any future requirement of the loan of the students.

These were some pros and cons of the educational loan taken by the students for continuing their studies. But a major fact is that the students are burdened with loan at a very small age. For this the colleges must accomplish scholarship programs for the intellectual students. They must also provide fee rebate to the students who are economically weak. This will help in boosting the morale of the students of the weaker sections of the society that they can stand in the same line as the students of the higher section of the society. As the education is same for all and any kind of economic disparity is totally unacceptable.    The role of college is very important in the life of the students who are financially weak.