Albert Martinez-Arizala
University of South Florida
Student Loan Crisis Essay
Student loans are an economic burden that are more recently plaguing society. 50 years ago,
the country wasn’t plagued by over a trillion dollars in student debt, that is likely due to society not
pursuing higher education as high as today and costs of university and living rising. Amending the
bankruptcy code to allow discharge of student loans would not be a viable solution in the short run but
in the long term I honestly believe it can reduce the amount of people going into massive debt that they
can’t handle.
In the short term it will relive consumers currently under debt and give student loan companies
massive losses. I believe that if student loans are allowed under bankruptcy they will become riskier and
the more risk there is to them to more expensive and harder to obtain they will become. When
companies see someone taking on a major that may not return a profitable job to allow them to pay
back their loans they may just not approve them. Companies will rely more on majors and what you are
studying providing less risk to them. This will decrease the supply of student loans thus increasing the
prices.
There are negatives and positives to allowing bankruptcy to student loans. The positives are less
risk for students and less overall debt incoming. The negatives are that their will be higher prices for
loans, not everybody will be able to attend school due to new requirements, loans will become more
limited disabling many people who can’t afford to go to school from being able to go. My solution would
be to lower interest rates on student loans, so people can make payments on their principal instead of
just the interest.
Lowering the cost of higher education would also decrease the amount of student loan debt. In
my opinion people who have pointless degrees should not be able to take out government loans. People
who are studying productive jobs that have high returns and high job outlook. They amount you are able
to borrow should depend on the job outlook and if you would actually be able to pay back these loans
after you graduate. The best solution to tackle to student debt crisis is not to allow bankruptcy but to
consider a persons major, how much they are borrowing a reasonable amount should be estimated
based on their future jobs salary outlook. This will lower the amount of money being borrowed as well
as providing a type of system that actually prevents students from obtaining debt they cant pay back.