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OVERVIEW::
Higher education is critical to a country’s ability to educate and create individuals that are social entrepreneurs and innovative thinkers but for many the only way to achieve that higher education is through student loans. Student loans are common in the present-day United States education system. The rising cost of education leads to increased need for funds to pay for the education leading into an array of problems that are deriving solely from the student loans.

THE PROBLEM::
For many students, the only way that they can afford to attend higher education institutions is through their use of the federal student loan system. These loans provide lower interest rates and a deferral of payment until a certain point if the student qualifies. On the surface, student loans are one of the best ways to finance higher education but the matrix of problems associated with them has environmental, economic, cultural, and political effects. According to the National Postsecondary Student Aid Study, of students obtaining Bachelor’s degrees, 65.2% of them are borrowing money and the average cumulative debt in regard to education is $23,118. This number goes up with private institutions and for-profit institutions. At a school like RPI that is a private, non-profit institution, the average cumulative debt of federal student loans is $27,535 and with many students going onto grad school and professional degrees, the average additional debt is $25,000 for a Master’s, $52,000 for a doctoral degree, and $79,836 for a professional degree. These numbers can be more than twice as high depending on the institution and other forms of aid. [FinAid]

According to the US Census, after-tax income broken down by education leads to the following incomes:
Professional Degree - $74,500
Doctoral Degree - $59,500
Master's Degree - $46,600
Bachelor's Degree - $39,000
Associate Degree - $31,500
Some College - $29,000
High School Graduate - $24,900 external image moz-screenshot-5.png
Some High School - $18,800
[Kathpalia, Anupam. ]
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According to the President’s Fiscal Year 2009 budget there was a total of $605.6 billion in federal education loans outstanding with a projected total in 2011 being $745.5 billion.

The graph below shows trends in occupations with the highlighted ones being those that are significant to look at because they are more costly education, lower salaried, or higher salaried.
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Occupation Trends

THE MATRIX::
A couple of the problems that student loans produce are: delaying entrance into the real world, a lack of funds to be invested in sustainability if one is still paying off student loans, a lack of monetary security, and an increased unequal distribution of wealth [wealthy do not need student loans and thus come out of school not owing money and with a clean start]. If recent graduates are given the choice between leisure/vacation time or a higher income, most will choose the higher income because they need the money to pay off their loans. In the United States, the Federal government controls the majority of the student loan money thus taking the money from some other source it could be invested in such as sustainability. How the money is paid back is also determined by the federal government in the above case which gives the government the freedom to determine how you pay it back and requirements of doing so. For example, only certain areas of study, required community service/military time, etc could become required if the government saw need. [Briggs, Sarah ] This method also eliminates the competition and capitalist pursuits especially in terms of interest rates. Loan deferment through continuous education after undergraduate education further delays the time the student takes to pay back their loan. With Affirmative Action, some minorities are more likely to receive aid than other races, but along contrasting lines, a College Board study found that only 19% of black students graduate college with no debt. A study done by College Board consultants found that middle-income students were the most likely to have higher debt when graduating from college as a result of their family’s income and the institutions they are more likely to attend. [Marchand, Ashley]

As a result of student loans requiring indebtedness following post-secondary education, an “instrumental self-interest” is favored over a “communicative social interest” decreasing the value of the community and shared resources so that not only do those with student loans have a decreased amount of funds to put into the environment, but they also have a narrowed vision and a increased emphasis on socioeconomic mobility. [See Borrowing Inequality; Race, Class, and Student Loans for more information]

Many individuals with student loans are forced to take multiple jobs to help pay off their loans decreasing the amount of time they have to leisure that can be put into the environment and decreasing their productivity at the work they are doing.

In New Zealand, a questionnaire was sent to all 296 graduate-first year junior doctors and of the 53% who responded, 65% intended to leave New Zealand within three years of graduating. The reasons for this focused on overseas travel, financial opportunities and job/training opportunities. 55% considered leaving the country because of student debt and 43% of students stated that their student debt influenced their specialty within the medical field. Two of the main reasons for staying in New Zealand were increased salaries and employer contributions toward student loans. The effect in New Zealand is that many of their New Zealand-trained doctors are emigrating and there is beginning to be a lack of doctors in certain fields that are lower salaried. New Zealand Medical Journal [Moore, James, Jesse Gale, Kevin Dew, and Don Simmers.]


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New Zealand Medical Journal


STAKEHOLDERS::
The major stakeholders of the student loan matrix are the Federal Government and private banks. On a lower level, large companies are stakeholders as well because they can generally offer higher salaries and increased benefits that those with loans will be more interested in accepting. Universities benefit as well because even though there may be financial need, they will still be receiving the same amount of money regardless of the student’s economic position [this is especially true in institutions that only offer financial aid and not academic scholarships].

CONSEQUENCES OF IGNORANCE::
Consequences of not addressing this problem of student loans will lead to a decreased interest and availability of putting the environment first when it comes to choices regarding money/salary or sustainability, an increased debt in both the population at large and the federal government loaning the funds, and an increased disparity in socioeconomic status and inequality.

POTENTIAL SOLUTIONS::
Potential solutions include income based repayment plans, people at poverty level not repaying until they are above poverty level, more vocational high schools, so not everyone will need a college education, decrease the “competition” [financial aid-based] between schools so students do not have to choose lower loans over education quality, and giving students more work-study with the work being based in sustainability techniques. [St. John, Edward P.][ Price, Derek V.] Online universities such as WGU [Western Governors University] offer online classes at rates as low as $2,890 per six-month term, not per credit.

CT is considering waiving student loans for “Green Jobs”. This will allow those who are graduating with many thousands of dollars worth of student loans to not only be able to enter a field they are potentially more interested in but they will be encouraged to enter fields that will help the environment. The Bill would forgive up to $2,500 per year for four years and also require that the student stay in state for 2 years beyond graduation. In Pennsylvania, there are also agriculture-related loan forgiveness programs. [“Editorial: Green Jobs Should Permit Waiving of Student Loans]

[ADDITIONAL INFORMATION]
Loan Statistics in the United States:http://www.finaid.org/loans/
Educational Inequality:Refinancing the College Dream: Access, Equal Opportunity, and Justice for Taxpayers
Borrowing Inequality: Race, Class, and Student Loans
Stampen, Jacob O. and Cabrera, Alberto F., “The Targeting and Packaging of Student Aid and its
Effect on Attrition”. Department of Educational Administration, University of Wisconsin, Madison,
WI. Economics of Education Review. Vol 7, Issue 1, 1988, pg 29-46
Higher Education:The Chronicle of Higher Education
Educational Statistics:National Center for Education Statistics

[REFERENCES][INCLUDES PEER_REVIEWED]
Kathpalia, Anupam. “Should College Loans be a Hindrance to Education?”. Ezine Articles. June 7, 2010. http://ezinearticles.com/?Should-College-Loans-Be-a-Hindrance-to-Education?&id=2445208

Kantrowitz, Mark. “Student Loans”. FinAid: The Smart Students Guide to Financial Aid. 2010.
http://www.finaid.org/loans/

Briggs, Sarah. “Four Potential Problems with New Federal Student Loans”. Suite 101. April 17, 2010. http://www.suite101.com/content/four-potential-problems-with-new-federal-student-loans-a225318

Johnson, Steve. “Student Loans: Why Going Back to School Defers Payment on Student Loans”. October 7, 2010. http://ezinearticles.com/?Student-Loans---Why-Going-Back-to-School-Defers-Payment-on-Student-Loans&id=5168398

“Editorial: Green Jobs Should Permit Waiving of Student Loans”. The Daily Campus. March 17, 2010. http://www.dailycampus.com/commentary/editorial-green-jobs-should-permit-waiving-of-student-loans-1.1271087

St. John, Edward P., Refinancing the College Dream: Access, Equal Opportunity, and Justice for Taxpayers. The Johns Hopkins Press, Baltimore, Maryland. 2003.

Price, Derek V., Borrowing Inequality: Race, Class, and Student Loans. Lynne Rienner Publishers, London, UK. 2004

Moore, James, Jesse Gale, Kevin Dew, and Don Simmers., “Student Debt Amongst Junior Doctors in New Zealand; Part 2: effects on intentions and workforce”. Journal of the New Zealand Medical Association. February 17, 2006. Vol 119, No 1229. http://www.nzma.org.nz/journal/119-1229/1854/

Marchand, Ashley. “Black Graduates Owe More Than White, Asian, or Hispanic Graduates”. The Chronicle of Higher Education. April 26, 2010. http://chronicle.com/article/Black-Graduates-Owe-More-Debt/65253/?sid=pm&utm_source=pm&utm_medium=en

[IMAGE REFERENCES]
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http://www.studentloansconsolidation.ca/images/student-loan-consolidation.jpg
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http://teens.lovetoknow.com/Cash_Graduation_Gift_Etiquette
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http://www.project.org/info.php?recordID=224
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