The Growth of Student Loan Debt in the US - Research Paper Example

This subject is fit for study considering the fact that due to high unemployment rates, most students’ graduates are faced with the difficult burden of having to repay the loans. Subsequently, the numbers of students borrowing the loan have increased too by about 70%, a similar proportion to the balance increase as owed by the same students. Statistical figures from the Federal Bureau also indicate that there has also been witnessed an increase in the total number of borrowers to about 17% in 2012 from under 10% in the year 2004.

The burden of the student loan has its extended repercussions given that few of these people who still owe student loans have not been able to purchase houses. The intention is that it has been extremely challenging for the former students who are still having unsettled students’ loans to finance mortgages for their houses. According to the Fed report, the high burden of students’ loans and higher delinquencies has a direct impact on the borrowers’ abilities to get admittance to other methods of funding such as the credit access, and also affect the performance of the other debts held by the people.

The concern of the escalating rate of students’ loans burden has been keenly monitored by the Consumer Financial Protection Bureau which also holds the view that the high burden of debt on such students leads to the raising of pertinent questions such as the domino effect of the debt on the general American economy. Therefore, considering these statements and reports, it is quite clear that the issue of students’ loan is going to be a serious drag to the economy taking into consideration the fact that most of these young people who have debts are not going to be able to constructively participate in the enhancement of the economy like the former generations when they are faced with a loan debt burden that would require them to make extremely large payments out of their incomes