Cause and Effect Essay on Student Debt: Sample Included

Student debt is actively slowing the growth rate of the economy of the United States. Because it makes graduates unable to make progress in their lives. Students make decisions to attend college to pursue their goals and have a better future. However, the tables are slowly turning. The number of students attending college is gradually decreasing every year. Furthermore, the cost of attending college is outrageously high, and also, the loans students require to pay for college have a negative impact on the students, especially after college. Thus, Essayaxe.com makes this article suitable to elaborate on the cause and effect essay on student debt.

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Statistics show that the two major factors affecting the growth of the economy of America and the American people include the increase in the cost of tuition and the balances of students’ debt. The average cost of tuition is approximately $30,000 to $34,000, and the values are increasing every year. Additionally, the increase in the prominence of student loans is likely to narrow the chances and options of students to attend and complete college. However, loans make the central component of college finance since most students planning to attend college do not have jobs, and most of the parents and guardians have insufficient funds to pay for their children’s cost of college. Hence, this cause and effect essay on student debt is of significance.

How Does College Debt Affect Future Life Choices of Students Essay

First, the main reason students opt to take student loans is the lack of income. Thus, a large amount of debt. Also, most young people make decisions to invest in education by borrowing against their future earnings. Unfortunately, such debts have an impact on their future income decisions. The need and demands for money lead people into taking loans in large amounts. As a result, the cost of tuition and lack of funds make students take loans. Such loans affect not only the students but also their parents.

Normally, college graduates are likely not to have their profession started immediately after college, while that is the start of the accumulation of the loan interest. As a result, the parents have to pay the loans before their kids get a job to start their repayment journey. Also, students aim to attend the best colleges, which are more expensive, to make a good impression on their employers in the job market.

Most students make the assumption that they will be able to pay back the loan and end up getting caught in situations that they are incapable of paying the money back. Most students focus on the present and getting over with college. Usually, students are not economically smart, and thus, they find themselves in some economic problems after graduation. They do not normally give much thought into the accumulated debt over the college period until when they start their own life. Furthermore, borrowers cannot entirely forecast the surprises life is likely to throw at them affect their loan repayment process.

What Causes Student Debt?

Causes of Student Debt

Several college expenses require money. Basic necessities such as shampoo, toilet paper, toothpaste, refreshment products, and food require money to make living easy. Also, students need to go out with friends, have fun, and spend some time with their friends. Additionally, books make the largest portion of the required necessities in college. However, most colleges no dot provide books needed for some classes. Hence, students have to find ways to pay for such books on their own. As a result, students opt for loans to make all these possible.

Effects of Student Loan Debt on Students

Student debt is a huge social and economic drag to the students having the loans. However, student debt affects both the students and the people around them. The economic impact on the students is that the debts hinder students from getting jobs and constantly have to make monthly payments to pay loans off.

On the student social life, students’ debts can affect students such that they would rather consider regular, minimum wage-paying jobs. Also, students who fear debts and borrowing may fail to consider the benefits and advantages of higher education, and thus, regulate themselves to low-paying jobs and few opportunities available.

Most of the students in college need money due to tuition cost, lack of income, financial education, their choice of school, and other essential expenses. Since most students depend on themselves for finances, they opt for loans. These high expenses are conflicting students’ interests and intentions to make their lives better and have a better job.

Can Student Loans Affect Buying a House?

Carrying student debt may affect several areas of your life, from buying a house and saving for retirement. Statistics show that most students are unable to buy a car or a house because of the already present debt they have. However, student loans allow students to have some credit to make it possible to buy houses and cars; conversely, the cost of the loan has a negative economic toll on the student. When paying back loans, there is a limited amount of money available for expenditure, as most of it is channeled to loan repayment.

Priorities change as soon as one is done with college, like having kids and getting married, and as a result, one can be forced to settle for any job they land into simply to pay off the loan and fail to attain their dream jobs. As a result, there is a negative impact on the repayment of the loan. In as much as student loans are not anyone’s fault, it does have significant negative effects than the positive effects.

Considering the economic stability of the nation, the only option as at now is for the government to decrease the number of students attending college. This act can be unfortunate, too, since most people will miss the chance to attend college. Therefore, the topic of cause and effect essay on student debt is essential.

cause and effect essay on student debt

How Do Student Loans Affect your Life?

There is rising student loan debt, and in as much as there are positive effects of student loans, there are several negative effects. Therefore, comprehensive information using why student loans are bad essay illustrates that, if you fail to pay back your student debt, debts posse a significant hindrance to your choices for several years.

There are several effects of student loan debt on the economy and eventually on the students’ life. Therefore, there is a great need for an informative speech on student loans, to better the understanding of students on what loans entail and financial ethics surrounding loans.

It is unfortunate how most college students lack experience with money and end up taking out more money than they actually need. It is essential to ensure that the money you take is all you need to help you borrow as little as possible.

Do Student Loans Go Away After 7 Years?

There are certain circumstances when a student loan may be forgiven. However, this is almost never when there is a default.

Additionally, co-signing student debt is vital, since there is an obligation for the co-signer to pay for the loan in case the primary borrower defaults. Mismanagement of student loans could implicate profound effects on your life.

The following are ten negative effects of student loan to your life:

Higher Chances of Default Rate

Having a significant amount of student loan debt increases the chances of default.

The Federal Government Might Take Hold of your Funds

Defaulting on federal loans for more than 270 days reduces your chances of receiving your federal or state tax refund after a short period. As a result, money is withheld for a long time. The federal government is in a position to seize those tax refunds when you default. Also, the feds are capable of garnishing up to 15% of your income to pay back your loan.

student debt

Possible Job Disqualification

Some companies regularly conduct background checks inclusive of credit checks. There are some companies conducting background checks on some applicants, while others conduct background checks on all job applicants. Therefore, in case you are a student having late student loan debt, it is advisable to communicate this prior and let your prospective employers view it least they hold it against you.

Your Student Loan Does Not Go Away

Student loan debt varies from other types of debt. For instance, consumers or business owners always provide collateral for their loans that the bank can use to claim their loan. Conversely, a student loan debt has no collateral. Whether you spend the money for school or not, there is nothing to give back in case you are unable to pay the money.

Lower Credit Score Ratings

Lower ratings occur when there is late payment. Credit bureaus treat student loans like any other type of loan. Therefore, failing to make payments on time subsequently affects your FICO credit score. Consequently, lower credit ratings are an indication of higher risk, and thus, lenders will be less likely to provide you with credit to make basic purchases, like a house, a car. Additionally, the amount of interest charged will increase in case the credit application is approved. Lastly, credit ratings have a great impact on your insurance rates.

Possibility of Foregoing Graduate School

Typically, undergraduate accumulates around $27,000 in student loans. Therefore, student loan debt can be a hindrance to attending graduate school. This is because students leave their undergraduate schools with a significant amount of student loan debt; thus, they cannot afford to acquire another significant amount of loans.

cause and effect essay on student debt

Hindrance To the Possibility of Buying a House

Statistics from Equifax in 2015 indicates that the main hindrance to purchasing a house is the existence of student loan debt. Furthermore, students with loan debts say that even when you are in a position to repay the loan monthly, channeling money toward your student loan can prohibit one from saving enough money for the minimum down payment needed by most lenders.

High Likelihood of Staying at Home

While some students without loan debt can afford to buy a house, others with student loan debts cannot afford to rent apartments. Most of the young adults between the age of 23 to 37 stay home with their parents because they are not making enough money to pay back their student loans and, at the same time, pay rent.

Lower Net Worth

From the report on disparities among college graduates having student loan debt vs. those without debt in 2004 by Pew Research Centers indicate that; the median net worth of a household headed by a college graduate below 40 years without student loan debt is seven times higher than the median net worth of a household headed by a college graduate below 40 years with a student loan debt.

You Might Be Unable to Pursue your Dreams

Student loan debt affects not only your standards of living and financial independence but also determines the dreams you pursue. For instance, you might desire to work for a nonprofit organization. However, you might forego theses aspirations for more paying jobs to cover your student loan debt payments. That is to say, and you might be forced to sacrifice a job that fulfills your purpose for a job offering a higher salary.

cause and effect essay on student debt

Student Loan Forgiveness Essay

There are several questions like why is student debt so high, measures on how to burst or reduce the student loan bubble, and how to eradicate the student debt crisis? Therefore, we Essay Axe have our team of essay professionals who have several student debt essay samples, which are significant to both students and business owners.

Cause and Effect Essay on Student Debt: Sample

A cause and effect essay explores how an event came into being, that is the cause, and what happens as a result of the events, that is the effect.

The general format of a cause and effect essay is as below:

1. The introduction

In the introduction, you describe the situation you will explore in your essay. Include the thesis statement, where you indicate the main cause or effect of the situation.

2. Body or the paragraphs – causes

Begin with what you feel is the main cause of the situation, give evidence to support your argument. Afterward, describe other paragraphs on the causes.

3. Paragraphs on the effects

Begin with the most significant effect and provide evidence to back up your claim.

4. Conclusion

You put emphasis on the thesis statement and summarize your key points.

Conversely, you can decide to begin with the effects than the causes depending on your side of the argument.

The following sample focuses on a few causes and effects of student loan debt.

Cause and Effect Essay on Student Debt: Sample

The introduction

The student loan problem is affecting several economies where the federal government offers loans for students to facilitate their college education. Several students have a significant amount of student debt. Subsequently, the defaulting rates are increasing each time. Furthermore, the techniques employed to collect the loan are faced with challenges, such as improper tactics of recovery and misinformation concerning the repayment options.

You can then provide a few facts on a student loan.

Reports on student loans vary since the loan owed varies from student to student. It is unfortunate how some students drop out of college without their diploma, yet they have the student loan, that is, dept without a diploma. As a result, there exists a distortion on the statistics on defaults. There exists information asymmetry on the student loan repayment techniques. Thus, they forgo current loan benefits. So much emphasis is put on the loan application and the entire process of getting the loan, whereas, very little information is provided regarding the repayment options and methods. Therefore, it is evident that the loan repayment reforms and inadequate.

Body on causes

In this sample, we will mention only two causes, but you can include as many causes as possible.

First, high tuition fees. Most students select their dream colleges regardless of their financial position—most of the best-known institutions of higher learning charge high tuition fees. Consequently, most students who land such opportunities do not hesitate to apply for a student loan to afford to stay in the institution.

Secondly, living expenses. Several college expenses require money. Basic necessities such as shampoo, toilet paper, toothpaste, refreshment products, and food require money to make living easy. Also, students need to go out with friends, have fun, and spend some time with their friends. Additionally, books make the largest portion of the required necessities in college. However, most colleges no dot provide books needed for some classes. Hence, students have to find ways to pay for such books on their own. As a result, students opt for loans to make all these possible.

Body on effects

First, one is likely to forego grad school. Typically, undergraduate accumulates around $27,000 in student loans. Therefore, student loan debt can be a hindrance to attending graduate school. This is because students leave their undergraduate schools with a significant amount of student loan debt; thus, they cannot afford to acquire another significant amount of loans.

Secondly, you might not be able to buy a house. Statistics from Equifax in 2015 indicates that the main hindrance to purchasing a house is the existence of student loan debt. Furthermore, students with loan debts say that even when you are in a position to repay the loan monthly, channeling money toward your student loan can prohibit one from saving enough money for the minimum down payment needed by most lenders.

Conclusion

To conclude, college cost in the United States is slowly increasing. Although there are factors that make such increments an understandable reality, other factors stress the negative impact it possess on both the economy of the American people and the concerned students.

Are you still having any questions on the cause and effect essay on student debt, visit Essayaxe.com to get more samples of student debt essay. Our team of professional provide every client with a custom-made essay free of plagiarism and satisfies the demands.

In conclusion, the entire activity of student loan debt puts the country’s economy in a huge amount of debt. Thus, the government should consider granting free tuition for public universities and colleges. Also, the cause and effect essay on student debt helps shed some light to improve financial literacy and avoid mismanagement of funds.

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