A pertinent issue that has been widely ignored in the United States is that of the crippling student loans debts and its effects on a generation had banked on the fund bettering their chances of securing a high paying job. Currently, the Federal government owes close to $1.5 trillion in loans that had been provided to students to further their education (“Trump’s Silence on Student Loan Crisis is Deafening” 1). What is even more shocking is that presently student loan debts have skyrocketed to a level that is way past that of revolving consumer and credit card debts combined. About 44million of the population in the United States carries a average debt that is close to $34, 000 with interests alone amounting to $90 billion annually. Critics of the student loan system have accused the Federal Government of profiteering from a program that leaves young adults in a state of limbo when they are forced to struggle for the rest of their lives to clear the loan (Best and Best 45). The situation is further exacerbated by an absence of statutes of limitation and a lack of bankruptcy protections which means that there is no safety net for those who took them. In her piece, “Attacking Student Loans’’ by Carolyn M. Brown, an editor at Black Enterprise brings this issue to perspective by using Bryan Mitchell, a Business Administration graduate from the University of New Haven (UNH) as an example of how this flawed system can affect the progress of an individual. The purpose of this essay is to provide an in-depth evaluation of “Attacking Student Loans’’ , with special focus on Mitchell’s case, the steps he is taking to free himself of his $120,000 student loan debt.
Student loans are more often than not only confined to a federal source. They can also emanate from private firms and banks that offer lending services to students who prefer to go at it alone and in a lone ranger fashion (Akers 3) .For those who qualify and are awarded these loans, the reality of what they got themselves into dawns on them as soon as they complete their higher education program. For most public employees such as teachers who earn a modest net monthly salary, life becomes challenge especially if intends to make immediate headway in life. It is not a hyperbole that most students who are “fortunate” enough to get these loans will be virtually unable to clear it in their lifetime. In Carolyn M. Brown’s piece, she does a superb job in bringing this issue to light by using Mitchell as an example of how unsuspecting young ambitious Americans fall into the student loan trap. In the four years that he spent in the University of New Haven (UNH) studying for an undergraduate degree in Business Administration (B.A), he was left with a $ 120,000 in student loan debt (“Attacking Student Loan Debt” 1). The debt accrued from his fees and tuition that cost an estimated $15,000 every semester together with two Federal loans that were subsidized at a rate of 6.5% and eight other bank loans that were unsubsidized with interest rates that between 2.5% to 9.75%(“Attacking Student Loan Debt” 1). The sad part is that is required to pay an upwards of $700 monthly which is close to one-third of his meager monthly income, towards servicing the interest. Brown relates Mitchell’s predicament in great detail, showing the darker side of student loans.
According to Brown, Mitchell’s is not an isolated case. A majority of Americans are facing the same challenge, albeit suffering in silence with student loans preventing them from buying their dream homes or even starting a family. From a financial expert’s point of view, student loans are viewed as a “good” debt as it essentially improves their potential for higher earnings in future. However, the reality on the ground is not always so with college graduates having to seek second jobs to pay off their loans as their income is more often than not less than what they are expected to pay back. Brown’s opinion centers on the burden that student loans bring upon the lives of young adults that can take 20 years or even more to pay off. She gives a staggering statistic; most undergraduate students leave the institutions with an average of $ 20,000 in student loan debts while graduate students have to grapple with a debt that can range from $30,000 to $120,000 (“Attacking Student Loan Debt” 1). Brown acknowledges this problem and tries to bring forth feasible solutions on how to avoid being swallowed by the student loan Leviathan and how those who already took it can manage their money in better ways that will ensure timely servicing of these debts so as to focus on other important things in life.
Brown’s subject, Mitchell, got into the debacle that he is currently in due to his “do it yourself” approach in life that led him to take independent choices such as financing his own college education. In retrospect, he regrets filling that Free Application For Student Aid application as he admits that he was, in all honesty, naïve about the reality. (“Attacking Student Loan Debt” 1). Now that he is older and most definitely wiser, he opines that seeking assistance from his collage’s Financial Aid Department would have been the best choice for him as he would have sought the advice of counselors (“Attacking Student Loan Debt” 1). These individuals would have been of great help in assisting him investigate any grants, loans or special programs that were on offer and specifically those for which he was eligible. His biggest mistake was to borrow money directly from an assortment of banks whose interest on college loans for students, as he later came to find out, were relatively high. These loans often attract students as they are easy to secure, but in the long run end up become too expensive for the students to pay back in time. Because there is no collateral for student loans awarded, the interest charged becomes higher (Collinge 1). Mitchell admits that he was oblivious of this fact which came to haunt him later on in future. It is important to note that Mitchell has learned from the mistakes that he made during his undergraduate years at college with his current employer now paying for his master’s degree.
Brown’s article intends to depict the adverse effects that student loans can have on individuals but at the same time giving them solutions on how best to clear them while embracing new spending habits. Mitchell, for instance, now works full time at the prestigious Goodwin College located in East Hartford, Connecticut working full-time an officer in the admission department earning about $40, 000 annually(“Attacking Student Loan Debt” 2). In order to take on this arduous financial challenge, he is fully committed to making changes in his lifestyle. For a start, he has taken a part-time job to boost his income, reducing his living expenses and also going to the extent of making an application for tax credits on his college loan due to the interest on his amount. Additionally, he intends to seek the services of a tax adviser to know whether he currently qualifies for the Public Service Loan Forgiveness program (“Attacking Student Loan Debt” 2). Brown is instrumental in providing help for individuals who find themselves in financial ruts such as the one Mitchell was in. Through the Black Enterprise, she pens down a seven-year plan blueprint that is meant to assist Mitchell and individuals of his ilk to annihilate their outstanding student loan debt.
Trimming living expenses is the first step suggested by Brown. Mitchell, for instance currently rents an apartment that costs $600 monthly. According to Brown’s assessment, Mitchell can start by moving in with a roommate in an apartment that cost $800 a month, saving $200. If he does this continually, he will have $2, 400 annually to contribute to his loan settlement.
Another practical option is boosting one’s discretionary income. According to the piece, Mitchell is making the necessary arrangements to earn an extra figure of about $200 weekly as a personal trainer in his local gym as a personal trainer (“Attacking Student Loan Debt” 2). A recent promotion also guarantees him an increase of $5,000 annually that comes in handy in his attempts to settle his debt.
Paying down all existing loan principles comes in third as a feasible way to settle one’s student loan arrears. For a start, Mitchell should apply extra payments aimed at the principal of the student loan taken with the highest interest rate. He should apply this strategy until his clears the whole amount.
Building a savings reserve is important, not only as a contingency measure but also in having money ready to settle the student loan debt. A suggestion in the article is that Mitchell set aside monthly savings that amount to $100. His goal is to ultimately clear his debt but it is important to remember that emergencies always seem to come when one least expects them, making it vital to always be prepared.
Staying ready with a 401(k) payment is also an important way to offset student loans (“Attacking Student Loan Debt” 2). Mitchell should not worry about other investments at the moment, which means that it would be advisable for him to stick to his 5% contribution regimen. Brown ends by giving a crucial piece of advice; attending state university or college can go a long way in reducing ones costs in fees and tuition as residents more often than not offer lower rates. It is thus paramount for students to put all this into consideration to avoid regretting their decision in future.