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Staff Editorial: Do student loans really benefit students?

Submitted by Liz Fox on October 24, 2013 – 12:35 pmNo Comment

Among one of the largest problems facing modern college students is student loan debt. Because of varying interest rates and tuition costs, the amount of debt often varies, with students attending private colleges and Ivy League universities sinking themselves into a financial hole far more than those going to public schools. But while UALR students may not accrue the same amount of debt as that of a Harvard grad, the spike in tuition and current loan legislation do little to provide hope for current students as well as those in the future.

Loan newcomers are often greeted with a number of questions, most of which have answers heavily dependent on the income of the student as well as parents. Many first-time freshmen enter college with one or two minimum-wage jobs on their resume, leaving their financial aid to be determined by their parents’ salaries. While this can do service to low-income students who receive Pell Grants and other forms of federal aid, loans are often pushed in addition to these grants, offering semi-reasonable amounts to students willing to take out thousands of dollars for immediate college admission.

This is considered “good debt” by creditors, but the long haul spells out something much different. A proposal conceived by the University of Arkansas system last May — which cited operational and associated costs —  led to a 5-percent hike at the beginning of the 2013. This might not seem like much to the average student, but this increase barely ensures part-time coursework for a student who borrows a $7500 loan for the entire academic year. While the disbursed amount may vary year to year and depends wholly on individual circumstance, this means a student can acquire up to $30,000 in debt (interest rate notwithstanding). For a full-time student, the cost can be several thousand dollars more, which is unacceptable for someone seeking a bachelor’s degree in a four or five-year period.

With high interest rates becoming more of an issue as years pass, students often find it impossible to foot the bill themselves. According to recent legislation, this spike benefits not only lenders like Sallie Mae and Wells Fargo, but also the federal government at large. The latest deal, struck by the Bipartisan Student Loan Certainty Act last summer, may do better for some undergrads who will no longer have to depend on Parent PLUS loans. But according to Sen. Elizabeth Warren of Massachusetts, changes in legislation will generate up to more than $184 billion in profits for the government over the next four years. While this may seem beneficial for a nation that’s up to trillions of dollars in debt, it does little for students who have little or nothing to do with the United States’ current financial hole.

Multiple representatives have advocated for the lowering of college costs since the Obama administration began, but little has been done to achieve it. While some stipulations have benefited a number of future enrollees, current students are already struggling with sizable debt that will follow them into old age. It’s up to these representatives – who should work in conjunction with university officials – to help pass legislation that allows some degree of forgiveness. But until then, student loans should be researched and taken out carefully, for fluctuations in tuition rates may prove fatal to the blind or passive student.

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