Tuesday, April 15, 2014
Student Loan Borrowers' Costs to Jump as Education Department Reaps Huge Profits
http://www.huffingtonpost.com/2014/04/14/student-loan-profits_n_5149653.html?utm_hp_ref=politics. DUE 21 APR 2014. What does Chris Hicks claim is the motivation of the Department of Education? Name 3 economic repercussions of increasing student debt after the student graduates?
Subscribe to:
Post Comments (Atom)
It is estimated that the U.S. Department of Education will make $127 billion from student loan debt in the next 10 years. According to Chris Hicks, who leads the Debt-Free Future campaign for Jobs With Justice, a Washington-based nonprofit group, the main motivation of the U.S. Department of Education is profit. This money is then used to fund the federal government. With debt interest rates up to 8.27%, new economic repercussions can surface such as, student loan borrowers being less likely to start small businesses, save for retirement, take out a home mortgage or buy a car. I'm sure our founding fathers would be very disheartened if they knew how much of America's future will be in debt just to get an education.
ReplyDeleteThe staggering student crisis is well..... just that. The U.S. Department of Education will make $127 billion from student loan debt in the next 10 years. The crisis is evident even in day-to-day life. My dad knows firsthand the increasing consequences of student debt. Federal aid paid parts of his way through college. He finally paid back his debt from undergrad and med school once he was about 35, even on an up and coming doctor's salary. Imagine the looming debt for someone with that kind of salary in today's age. The lasting repercussions of increasing the student debt are immense. Students will not have enough money out of college to invest into the economy. They will not have enough money to put away for their retirement. Also, Big businesses that loan out money will continue to reap the benefits of abusing young adults aiming to create a career for themselves. Limiting that process will only limit the students' abilities to make a positive impact on the economy.
ReplyDelete"The U.S. Department of Education is forecast to generate $127 billion in profit over the next decade from lending to college students and their families, according to the Congressional Budget Office." This is sheer absurdity.
ReplyDeleteChris Hicks claims that the motivation of the department is to make make money off of students.
Chris Hicks leads the Debt-Free Future campaign for Jobs With Justice, which is a Washington-based nonprofit group.
With such high student loan interest rates, students will be hindered from having stable livelihoods after college.
Firstly, students won't be able to purchase homes and cars, which will also hurt the American economy.
Moreover, students will need to make more loans in order to help pay for some of life's necessities. If student's welfare wasn't already ruined, this will do it.
Lastly, students who are slaves to student loans will not have enough money to save for retirement. It is estimated that students will need thousands of dollars for their retirement. Students will be forced to work instead of retire due to lack of finances.
Anita Pizzirani (Pizza)
Period: 1
As with nearly all existing entities in the world, the U.S. Department of Education's main priority is money. It has been estimated that within the next 10 years, the Department will make a profit of $127 billion from student load debt. Although officials discarded the idea that the newly passed student loan law would increase costs for borrowers, recent reports indicate that costs will rise beginning in the 2015-16 school year--a whole year earlier than previously predicted. The fact that the Department of Education is relying so heavily on student loan debts to pay off all future debts of theirs indicates their lack of research on the other consequences of their actions today. By progressively increasing costs of loans, they are only creating an unstable future economy. With more debt to pay off, these students will not have enough money to invest in retirement plans. They will probably spend less in the market since the loan debts will take a larger chunk out of their paychecks. The program should also consider the fact that with such large loans already, these students are less likely to start small businesses, take out a home mortgage, or buy a car. The Department may be making a profit in the long-run, but they are also destroying any chance of the national economy from prospering. After seeing the selfishness of their actions, I kind of hate this program. My parents' income places us in the middle class, which is, in my opinion, the toughest place to be in when regarding student loans. Because of where we stand, I am not eligible to receive large scholarships or grants from both government or company sponsored programs and at the same time, the cost of these colleges range from 25-100% of my parents' income. At this point, it seems that I will have no choice but to take out a staggering amount of loans--no matter which college I plan to attend. If I ever make it into the big league in this world, I'll be sure to NOT thank the Department for their meaningless words and deceiving intentions.
ReplyDeleteChris Hicks emphasizes that the motivation of the department of education is to rake in profits. The student loan program isn’t about helping students or borrowers -- it’s about making profits for the federal government. The economic repercussions of increasing student debt after the student graduates can not be understated. Researchers have found that student loan borrowers are less likely to start small businesses, save for retirement, take out a home mortgage or buy a car. Hicks also explains that borrowers would most likely default on their federal student loans rather than give up their credit cards or forgo health insurance. Too many students are graduating (or dropping out of school) with an unsustainable level of federal student debt. This bubble has many parallels to the subprime/housing bubble and is now having a significantly negative impact on students, the economy, and taxpayers. The share of 25 year olds with student debt increased from 25% in 2003 to 43% in 2012, and over the same
ReplyDeletetime period the average student loan balance among 25 year
olds with student debt grew by 91%.
The program is predicted to generate an average annual profit of about $12 billion through 2024. This is a profit-making machine for the Education Department. Hicks claims that the student loan program is not about helping students or borrowers -- it’s about making profits for the federal government. Researchers have found that student loan borrowers are less likely to start small businesses, save for retirement, take out a home mortgage or buy a car. Hicks said younger borrowers face daunting circumstances. If forced to choose, he said he reckons that borrowers would most likely default on their federal student loans rather than give up their credit cards or forgo health insurance.
ReplyDeleteThe facts have shown that the U.S. Department of Education will make around $127 billion from the student loan debt alone in the next ten years. This is an insane amount of money to be talking about, especially when it involves students. According to Chis Hicks, who is the leader of the Debt-Free Future Campaign for Jobs with Justice: a Washington nonprofit organization, the motivation behind the Department of Education is the idea of profit off of students. Profit is what they seek in everything. The money, after being taken from the students, funds the federal government. The interest rates are becoming higher and higher as the years to come bring more and more students. The interest rate is around 8.27% as of right now. Theses rates are stopping the students from having enough money to live a stable or overachieving life after they get out of school. For the first reason, students will not be able to start businesses right out of school, They would need to wait as many years as it takes to relieve some debt before taking out more. Another thing students will not be able to do is take out a home mortgage or purchase a car to get them around. Not only will this hurt the students, this will also hurt the economy as the purchasing of houses and cars will downfall greatly. The last reason might be the biggest of all. If the students are working full time in order to pay for their loans, they will not have enough money to buy the necessities in order to live, or save for their retirement. If These people don’t have enough to retire, they will be worked into the ground until they die. If this was the ending, then what was the point in going to college and taking out these loans anyway?
ReplyDeleteChris Hicks leads the Debt Free Future campaign for Jobs with Justice, which is a nonprofit group. The main thing that Chris Hicks says motivates the Department of Education is bringing in money. They aren’t helping students as they should by giving those loans, because they are only thinking about making themselves more and more rich. It was estimated that in the next 10 years, the Department of Education would make a profit of about $127 billion. Because of the increasing cost of taking out student loans to pay for your education, students who graduate from college will be very limited with what they can contribute to the economy. They won’t have enough money in order to put away for their retirement, which is bad because of how today’s generation will need more money to live comfortably when they do retire compared to earlier generations. College graduates won’t be able to buy cars, homes, and other goods because they won’t have enough money, and this doesn’t help the circulation of the money flow in the economy. By increasing costs of loans, they are only creating an unstable future economy for us. The Department of Education should consider how their actions are preventing students to start small businesses or taking out a mortgage.
ReplyDeleteEstimated to make 127 billion dollars over the course of the next decade, Hicks, the leader of the Debt-Free Future campaign, believes that the Department of Education operates solely to profit. He believes that this government branch is more concerned with filling their pockets than they do about helping students. Hicks thinks that they are simply trying to make money for the federal government. The poor policy created by the Department of Education has lead to many negative economic repercussions. First of all, researchers have found that those who are paying off student loans are less likely to buy a car, buy a house, save for retirement, or take out a mortgage. Secondly, borrowers are more likely default on their federal student loans rather than give up their credit cards or forgo health insurance, which damages the economy. Lastly, high student loan interests are restricting students from receiving a higher education, limiting their career abilities, creating worker shortages, and creating an almost domino effect of economic damage in all markets.
ReplyDeleteThe U.S. Department of Education will make $127 billion from student loan debt in the next 10 years. Chris Hicks claims that the motivation of the department is to make money off the students. Chris Hicks leads the Debt-Free Future campaign for Jobs With Justice, which is a Washington-based nonprofit group. the first reason, students will not be able to start businesses right out of school, They would need to wait as many years as it takes to relieve some debt before taking out more College graduates won’t be able to buy cars, homes, and other goods because they won’t have enough money, and this doesn’t help the circulation of the money flow in the economy. Lastly, high student loan interests are restricting students from receiving a higher education, limiting their career abilities, creating worker shortages, and creating an almost domino effect of economic damage in all markets.
ReplyDelete“The student loan program isn’t about helping students or borrowers -- it’s about making profits for the federal government” says Chris Hicks. I don't think it could have been put any simpler than that. Students and their families will not only be borrowing more but repaying these loans at higher interest rates. The interest rates are higher than the cost of the federal government to fund these loans, creating a profit for the federal government. The department of education is too dependent on this profit from student loans to support lower interest rates and debt relief. After graduating, students will have a great weight on their shoulders as they spend most of their adult life out of university paying back student loans. As stated in the article, some people have a monthly payment coming out their paycheck to pay back loans which makes the payment more convenient however it may take longer and with interest, the amount will continue grow. Higher interest rates on student loans will cause less people to further their education and become more skilled. For example, my mother has held back on pursuing her master's degree in nursing because it has become so expensive and she other immediate responsibilities. If this is only now, imagine in the near future for younger students trying to get their degrees. These graduates will also be less likely to invest their money into our economy.
ReplyDeleteChris Hicks is entirely convinced that the country could care less about actually educating its students, rather, it cares about making a profit off of them. Not surprisingly, it is also true that American students care as much about their education as the Department of Education actually does. I wonder what would happen if the Department of Education were to make its priority learning and enhancement of learning rather than collecting money on student loan debts... Increasing the debt after the student graduates is basically economic suicide. We want these brand new members of the working class to contribute to society with the money they're earning from their new jobs. But they most certainly will not if they have to keep paying off student loans for the rest of their adult lives. Not only will they be stuck with sending the majority of their paychecks to the student loan debt, they will be much less likely to purchase a car, a house, or other big-money items, which will hurt, rather than help, the economy. This will discourage many people from going forward with their education, and will lessen the amount of knowledge within the general population. I mean, imagine all the possibilities available if they stopped making education about making ridiculous amounts of money off of others' strive to better themselves as human capital. Infinite possibilities, all being restricted by the fact that student loan debts are growing by the minute.
ReplyDeleteHicks claims that the Department of Education is not motivated by a concern for the well-being of students, but instead a concern for earning a profit. Costs of tuition and interest on student loans are both sky-rocketing, just as my graduating class is going to college. Students who borrow money to attend public institutions are essentially throwing all of that money away. The education system is soon going to collapse. One major implication of this is that students will leave college with massive amounts of debt. Students with useless majors will have a hard time finding jobs, but even more daunting is the results for students with public university educations. When only the most competent graduates are employed after college, those who went to sub-par schools and got arbitrary degrees will have trouble on the market. This means that they will not be able to pay back their students loans, and that the interest rates will only go up for the next generation of students. What the DoE should do it engage in risk assessment. Students going to good universities and who declare majors in relevant fields should be given the lowest interest rates, while less intelligent students who won't actually ever work should be given high interest rates. This would more effectively allocate funds to make our society the most successful.
ReplyDeleteChris Hicks claims that the motivation for this crazy loan system is that the Education Department is making a huge profit from it. He says it isn’t about helping students it’s more about making money for the federal government. The students with debt will face repercussions such as not being able to start their own businesses, due to the large amount that they will continue to owe. Also take a home mortgage or eventually own a car, and also retirement would be an issue for the students.
ReplyDeleteMister Chris Hicks suggests that the Department of Education is motivated by profit instead of actual education. According to article, all this student debt can have serious repercussions which includes borrowers less likely to open businesses or make big purchases. Less mortgages, less new cars, and less loans in general. Another effect is borrowers would be more likely to default on their student loans then on credit cards or health insurance. The economy would also slow down due to borrower's pay checks being used to pay off loans then on consumer spending.
ReplyDeleteHicks says that the Department of Education is not motivated by a concern for the well-being of students, but cares for earning a profit. The students with debt will face repercussions such as not being able to start their own businesses, due to the large amount that they will continue to owe. College graduates won’t be able to buy cars, homes, and other goods because they won’t have enough money, and this doesn’t help the circulation of the money flow in the economy. By increasing costs of loans, they are only creating an unstable future economy for us. The economy will slow because the money wont be paid back
ReplyDeleteChris Hicks says that the Department of Education is incentivized by money and profits that they would be bringing in from loaning money to students and creating money out of debt. If students are not able to pay off their debt for many years after their college education, most of their money will be funneled there instead of being spread around the economy, they will be less likely to build a good credit score, and they will be less likely to advance in the work force.
ReplyDeleteThe U.S. Department of Education is estimated to make about $127 billion in profit over the next decade from lending to college students and their families, according to the Congressional Budget Office. According to Chris Hicks, who leads the Debt-Free Future campaign for Jobs With Justice, a Washington-based nonprofit group, the main motivation of the U.S. Department of Education is to profit as much as possible! Students will not have enough money after graduating college to invest into the economy. They won't have money to set aside for retirement. Big businesses that loan out money will continue to suck young adults attempting to make a decent living dry of all of their money & ultimately, their potential to better the economy. Limiting the options for students to make a life for themselves will only limit their abilities to make a positive impact on the economy which in turn will affect everyone.
ReplyDeleteChris Hicks Claaims that "This is a profit-making machine for the Education Department,” said Chris Hicks, who leads the Debt-Free Future campaign for Jobs With Justice, a Washington-based nonprofit group. “The student loan program isn’t about helping students or borrowers -- it’s about making profits for the federal government.” The backlash to this is that Researchers have found that student loan borrowers are less likely to start small businesses, save for retirement, take out a home mortgage or buy a car.
ReplyDeleteOver the next ten years, it is predicted that the U.S. Department of Education will make over a 125 billion dollar profit in student loans. The raising interest rates on student loans are leaving families paying more for an education than ever before. Chris Hicks, leader of Jobs with Justice, a nonprofit group that supports debt-free futures, says that “This is a profit-making machine for the Education Department.” Hicks believe that the system is not meant to help students and families; rather it is meant for the federal government to make a profit. The worsening conditions of borrowers have led to Hicks and other financial experts to question the future of the market for student loans.
ReplyDelete“I really wonder whether the Education Department is thinking of the consequences of potentially setting up a generation of borrowers to fail,” says Hicks. There are many economic repercussions of increasing student loan debt. Following graduation, much of their incomes will go towards paying off debt and less money will be invested in the economy. Another repercussion is not enough money will be put away for retirement. With every paycheck a percentage of it is supposed to be put into retirement funds; it is compromised when individuals are forced to pay off their loans. Also, increasing debt will cause people to opt out of attending college, leaving our future generations less qualified for many career paths.
Chris Hicks, who leads the Debt-Free Future campaign for Jobs With Justice, a Washington-based nonprofit group, has come to the conclusion that the student loan program is nothing more than a “profit-making machine for the Education Department.”
ReplyDeleteIn my humble opinion, it really isn’t all that surprising that a government-sponsored program’s primary motive is money, but as you all know,,,,I don’t have a history of confidence on the federal government
Anyway, getting back to the issue at hand, the student loan crisis. Recent reports indicate that beginning in the 2015-2016 school year, a whole year earlier than previously predicted, costs will soar to new heights. The Department of Education thought process of relying on student loan debts to pay off all future debts they incur, indicates either a deficiency in the concern for the American society, a lack of understanding their consequences, or that our government is full of pompous idiots who believe profits are more important than people…(again I go with the latter).
They are creating an unstable future economy by raising the costs of these loans. At this rate, students will still be paying off their student loan debts by the time they retire. This means they will have no money to invest in retirement.
Another consequence of our government’s incompetence is, if they understood economics, they would know that people tend to spend less when they are in debt, which results in a slowing market. Today’s youth, because of their already amounting debt, are less likely to start small businesses, take out a home mortgage, or buy a car.
As a student who will be affected come the 2015-2016 school year, I myself will be subject to these outrageous student loan costs. I have no choice but to take out loans…well I do actually have another choice….that would be not to go to school at all. Personally, I feel that no amount of money would stop me from receiving a higher education, but hundreds of other students are weighing in the opportunity cost of secondary education, and it doesn’t look so bright. We, America’s youth, are supposed to be the future of this country, but if we cannot pay to receive a proper education…what will happen to America in the coming years. Honestly…the government has really did a number on itself; if this continues, any chance of future economic prosperity will dwindle completely.
Hicks believes that the motivation for the department of education is coming from the profit it makes, a whopping 127 billion profit to be made in the future. He believes that the department is more worried about money it is getting rather than the students it's helping. The increasing student will only lead to the students being unable to borrow money in the future for other uses such as for cars, home, etc. The increasing student debt will be the start of a collapse in the future.
ReplyDeleteChris Hicks thinks the motivation of the Department of Education is only to generate revenue. They don’t aim to aid borrowers through lending money, they just want to use the increasing interest rates to make a profit out of the higher debt incurred by students. They have no incentive to fight for debt relief to lower students’ debt burden because they have become exceedingly dependent on the revenue the loans produce for the Federal Government. According to the Federal Reserve, student debt has doubled since 2007 which seems to much of an increase to be only attributed to the crash. This can only be bad for the nation, not even in the long run, but soon enough. The national economy is hindered for the future because of the fact that these student loans will keep taking a chunk out of students monthly paychecks to repay. Student loan borrowers are less likely to start businesses which will also strain the economy. They will also be less likely to save money for retirement or take out mortgages to buy a home or a car, which could be terrible since we all know, the stupid economy runs on creating debt and they’re now all but damning themselves in every way possible. This of course will eventually throw itself back on the government and hurt them sooner or later but it has even more direct impacts on students in the future than those of years past. Oh, and the banking system will take a hit too. If forced to choose, borrowers would default on loans instead of giving up health insurance or credit cards. So it’s a “generation set to fail.”
ReplyDeleteChris Hicks is the leader of the Debt-Free Future campaign for Jobs With Justice. He claims that the motivation of the department of education is not aid for students or borrowers, but rather, to make profits for the governement.; its a profit making machine. costs of borrowing money are sky rocketing, so the department expects to make 12 billion dollars in profit this year. With this impending debt imposed on the students, if they are fresh out of college,m they probably dont have a great job, and even if they do they stil wont be able to pay off the debt for a while. they wont be able to invest and spend money into the economy, and they will be less likely to start a business or take out a mortgage. There are many repercussions to the student debt.
ReplyDelete