Business math: government + loans + inflated home prices = government + loans + inflated higher education prices

23 October Educational Loans In the article en d Loans: Debt for Life, Coy indicates among other things that a student loan is the only debt that you can be delinquent on without losing anything. If someone borrows to buy a house it can be lost due to the mortgagee’s delinquency. However, an education or the degree obtained can never be taken away. Coy (2012) also points out that in most cases borrowing a loan to obtain a college education pays off in the long run as salaries for college/university graduates are much higher than that for high school graduates. It is therefore, beneficial in that regard and so students’ loan is not a bad debt to have. However, this statement must be qualified as not all university graduates pursue studies for which their skills are in high demand.
It is obvious that students are recognizing the benefits of borrowing funds to pay for their education as student loans have surpassed credit card debt and auto loans. In fact, the publisher of FinAd. org, Mark Kantrowitz (cited n Coy 2012) indicates that student debt is growing by approximately $3, 000 every second. This translates to 180, 000 per hour or $4. 32 million per day. However, there are some students who are not able to make ends meet because they have not been able to obtain jobs in the areas in which they studied. This illustrates the importance of not just studying for something which is personally favorable but studying in order to fill positions for which jobs are in demand. Coy (2012) emphasized this point when he points out that while some graduates with degrees have to resort to becoming waiters and janitors, some employers are forced to recruit people from overseas to fill certain professional positions. In fact, New York Sociologist Richard Arum (qtd in Coy 2012) points out that many students are borrowing to finance education in certain fields that are not financially rewarding and this type of education is not worth taking out a loan to finance.
The economic downturn which started in 2007 has forced those who have lost jobs to resort to furthering their education as a refuge from the state of affairs in the job market. This has resulted in an increase in college fees and has therefore forced more students to borrow loans to finance their education. In fact, The Institute for College Access & Success (cited in Coy 2012) indicates that two-thirds of college seniors graduated with loans in 2010 with an average loan of $25, 000 per student. The State Higher Executive Association (cited in Coy(2012) also points out that while fees have increased significantly both state and local support per student for higher education has fallen to its lowest level in 25 years, when the figures are adjusted for inflation.
It is worth noting that an educational loan affects almost everything and Coy (2012) provides some statistics which indicates that between 14% and 40% of college graduates have indicated that it has had an impact on the careers that they have chosen (24%); it has resulted in a delay in major purchases (40%); it has delayed marriage (14%); and it has led to some of them returning to live with their parents (27%). While this is expected, it emphasizes the importance of making good choices and of not just getting a college degree for which a job will be readily available but one that will be able to repay the debt incurred without causing any major inconveniences.
Works Cited
Coy, P. Student Loans: Debt for Life. September 2012. Web. 18 October 2012