Article: Low-Cost Loans Entice Students More for the Cash Than a Degree, WSJ, March 3, 2014. p.A1&4 - Essay Example

Business loans have become the easiest way of earning a living for many Americans. Josh Mitchell’s article gives a brief of the situation. Education is emphasized in many countries including America. This is to encourage people to attain more than the basics of education in order to have a better chance in getting employment and being able to cater for daily basic needs. A study shows that the outstanding student loans have grown sharply because people have opted for student loans due to the lack of jobs or proper paying jobs (Stone, 35).

Recession has seen the cost of living rise to unimaginable costs and it has become harder to fend for families. The student loans are meant for financing higher education but a high percentage of it is used for sustaining daily needs. This has led to people incurring huge student loan debts. According to the federal Education Department data, the academic year 2011 – 2012 saw 68% of undergraduate borrowers hit the maximum limit mark. The untoward thing is that a number of of these borrowers did not log in any credits during that period (Collinge, 43).

The student loans do not have strict measures on borrowing and no follow up is done on how the cash is used. Their low interest rates have also attracted more people. Many people end up not finding jobs and life becomes unbearable. Some of them opt to go back to school not necessarily, because they want to but because they can get a loan that can sustain their needs. It is clear from the article that no strict measures are in place to monitor how the cash is used. It is additionally made shoddier by the reality that the schools are not allowed to deny funds even if the loan has exceeded the normal limit (Maeda, 52).

Most student loans taken are way above the normal limit. This should not be the case since the normal limit caters for tuition fee and living expenses. This trend has seen many people enter into debts that they may never get out of. A good percentage of the borrowers do go back to school with the loan but exceed the limit due to the need for extra cash. Capella Education Company examined student costs and debt; it revealed that a quarter to three quarters of loans taken by students were for other needs other than education (Stone, 45).

The positive side of this is that cash is readily available to those who would want to advance their learning and get enhanced jobs and the repayment is done after one is through and has a job. This gives people time to plan their finances and be able to repay so that the cash can be used by other people who want to go back to school. The negative side of it is that there are no strict measures to restrict the use of the loan. The major problem presented here is that the loan meant for education is used for other purposes (Collinge, 58).

This trouble is solvable if the administration allows schools to restrict or deny loans that are way beyond the normal limit. This will ensure that loans applied for are strictly for education purposes and normal living expenses. A provision that allows schools or the education department to monitor the use of student loans, and if the borrowers are actually taking credits in the various courses is essential. Another way the problem can be solved is if the tuition fee is paid directly to schools and the borrowers get upkeep cash only (Maeda, 73).

Works CitedCollinge, Alan. The Student Loan Scam: The Most Oppressive Debt in U.S and How We Can Fight Back. 25 Beacon Street, Boston: Beacon Press. 2010. Print.Josh Mitchell. Student Loans Entice Borrowers More for Cash Than a Degree. 2nd March 2014. Web. 9th March 2014 Maeda, Martha. How to Wipe Out Your Student Loans and Be Debt Free Fast: Everything You Need To Know Explained Simply. Boston, Massachusetts: Atlantic Publishing Group Inc. 2009. Print.Stone, Elliot. Student Loan Secrets: “They” Don’t Want You To Know About.

Newport Beach, California: California Consumer Law Center. 2013. Print.