STUDENTS’ COLLEGE LOAN FOR PROFIT 4
Students’college loans for profit
Students’college loans for profit
Today,higher education has become an expensive product for most Americanfamilies who are faced with low income and a weak economic structure.It is regarded as an ideal investment venture that every studentstrives to acquire. This is because it guarantees employmentopportunity and an ideal financial security. However, because offinancial constraints many students end up getting financial aid inform of student loans, which enables them complete their educationalgoals with hope of repaying back in future. Recently, many graduateshave been faced with heavy debts upon graduating and the jobs thatthey get do not guarantee them financial freedom. This is becausemost employment opportunities come with low incomes that are notsufficient enough to sustain them financially, after deductions aremade to repay their student loans. For this reason, they end upchained financially while trying to clear their student loans withlow income jobs.
ProfessorsSajay Samuel is concerned with today’s graduating students who areburdened with heavy debts, as they make their way to the new economy.In this case, there are about 14 trillion American students whohaving gotten financial aid for their educational needs because offinancial constraints, they owe the financial lenders about $ Itrillion (Samuel, 2016). Professor Samuel compares the currentpredicament with the past where higher education was nearly free andwas regarded as a public good. In addition, higher education wasreasonably affordable as any loans that any student accumulated, waseasily paid off by the date of graduation (Samuel, 2016). However,Samuel says that today higher education has turned out to be aconsumer product that is unaffordable with the current diminishedfamily incomes and personal financial constraints building profitsfor student loans industries.
Theeconomic conditions have forced many graduates to be tied up in theirstudent loans because of insufficient income. However, it isimportant to understand as the demand of higher education risesbecause of market requirements, many students have no choice but toget into debts because of expensive education. This is despite theirfinancial constraints and other risks such as unemployment in the jobmarket. Higher education has recently been characterized by sharprise in tuition costs and poor or low public funding (Samuel, 2016).As argued by Professor Samuel, the student loans has been proven tobe a consumer product because of the current debt accumulation of $2Trillion in diplomas only. Just as other products demonstrated in theeconomic theories, education has to be bought as an investmentstrategy.
Hugestudent loans are profitable not only to students who acquireeducation but also to the student loan industries. As demonstrated inthe last year’s financial reporting, the student loan industriesrecorded a profit of $1.2 billion (Samuel, 2016). Recent findingshave established that just as other form of loans, student loan canbe packaged with varying details depending on student’s financialneeds. In addition, because of the attractive financial returns onstudent loans, many colleges as well as universities are increasinglyinvesting in these securitized loans making double profits. In thisregard, many businesses have come up with vast advertisements onstudent loans in bid to gain advantage of the student’s ignoranceand innocence.
Therefore,with this worrying trend in the market industry, there is a need toimplement and regulate the student loan industry. This is becauseoriginally, the student loan was a form of public good that was meantto empower poor students financially. In addition, there is a need ofcutting down on higher educational costs as well stopping to packageit as an economic product (Samuel, 2016). This will offer manyfinancially constrained students an opportunity to gain educationalexperience as well as have financial freedom upon graduating.
SamuelSajay. (Feb, 2016).Howcollege loans exploit students for profit.Retrieved from>http://www.ted.com/talks/sajay_samuel_how_college_loans_exploit_students_for_profit.Date Accessed, June 13, 2016