Chase Ballard
RHET 1312
Instructor Beavers
Exploratory Argument Essay
January 12, 2016
Bankrupt but Educated
The same broken record plays in our youth starting in kindergarten and continuing in high school. We all heard from someone or another that college was the way to a good life. Wasn’t that one of the reasons we even cared about education in the first place? College can make or break you, and that’s something we can’t just sit back and watch while taking no action. In almost each case, every young man and woman decides to either pursue college or try out the work-force at an early age. There’s no telling who will be more successful or who will drive the nicer car, but times have changed and there is no guarantee to the American dream anymore.
I will be addressing the topic of student debt and how or if it should be altered. I will give three main sources and their differing viewpoints: President Obama and Vice President Joe Biden give their opinion on how they think that student debt should be handled, the Department of Education gives statements regarding student debt in a stubborn court trial, and the statistics provided by Casey Bond and Forbes are laid out in order to show us whether college is worth the whole ruckus in the first place.
Last year President Obama gave a goal for America to strive for. He wanted every student to have hope in extending their knowledge and opportunity in the workforce by being able to go to college without the fear of their own financial problems. Obama’s stated solution is as follows: “Let's tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years – and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college.” (White House 1)
President Obama feels as though it is unfair for a student to be in outstanding debt after following up with a degree and entering in a “lower-paying public service career.” The debt can be equally as burdensome for someone who suffers from unemployment after acquiring a degree, endures serious illness, or even for a college drop out. If we honored President Obama’s idea to limit payments to 10 percent of an annual income, students borrowing would not pay a penny over 10 percent of what they earn, assuming that they make at least $16,500 a year. If this law passed, more than 1 million students could take advantage. Forgiveness after 20 years of payments made on time would sound like a dream to many Americans. That’s exactly what President Obama has in mind, freeing many people of a debt that seems insurmountable.
In the recent case of Robert Murphy, a 65 year old man sought after filing bankruptcy in order to relieve himself of student loans. The Department of Education filed to a bankruptcy court to not allow this to be approved. Murphy had accumulated more than $220,000 of debt owed just from the federal student loans he took out alone. Murphy pled that he could work for as many years as his age would allow and he would still not be able to pay off these loans. However, court documents revealed the statement, “No student debtors should get a break unless there is a certainty of hopelessness with circumstances that have a total incapacity to change.”
A person is not confined to their current economic status. Some examples of a change in circumstances include a decrease in the number of dependents in a household that need to be provided for, the person’s spouse may enter the workforce to reduce the load carried, or an inheritance or outside gift might be redeemed. The Department of Education argues that “There are strong grounds for maintaining different standards for federal student loans." They also added that “Federal loans are not underwritten, have generous terms and protections, and the payments can be limited based on income. Private student loans, by contrast, are underwritten and most do not have a built in income- driven repayment plan." (Connolly 4)
The Department of Education sees that their system is fair and that the student is to blame if they are found in outstanding debt. With their “generous terms and protections” and flexible payments, no student should find themselves in a hole too deep. The Department of Education is not however, the party that does not have an absolute care in the world for consumers that have found themselves in debt. They are struggling to find a balance between collecting debts versus allowing debts to be discharged. (Rhode 3) The attorneys do provide a fair solution, stating that they would consent to discharging some student loan debt if and only if there are “undue hardships.” To constitute for an undue hardship, a person would have to fit into a category such as uncontrollable bankruptcy, mental impairment, or be a veteran with a disability. “(A) Borrower obtains student loans in order to complete a Master's degree. Upon graduation she starts working and making payments. A few years after her graduation, her child becomes seriously ill, with no prospect of recovery, requiring round-the-clock care. The child's illness is followed by a divorce, with no child support or alimony forthcoming. This set of circumstances makes the borrower unable to work full-time due to child care obligations. She works part-time, bringing in only a fraction of her full-time income. Her child's medical expenses are also extremely high.” (Rhodes 18) This is also an example of an undue hardship that constitutes an income-driven repayment option.
With the average student debt in 2015 creeping up to a little over $35,000 (Sparshott 3) many Americans wonder just how useful a degree is. That number is nearly twice what a degree cost years ago. “The growth of student loan debt is being compared to the recent housing crisis because of the significant growth of subsidized lending,” said Bryon Spicer, president of Spicer Wealth Management in Dayton, OH. “Just as the mortgage lending boom pushed home prices up, student loan lending has put upward pressure on tuition.”
College graduates with four-year degrees can expect to earn about $1 million more than high school graduates over their lifetimes, according to the U.S. Census Bureau. A graduate degree adds another $400,000. While those numbers sounds well worth it to us all, you also have to factor in that students with just a high school diploma have at least a four year head start into the workforce, and most importantly no student debt. The sad truth is that even with a degree, there are still many that find themselves unemployed. If that person is like many in the same situation, they now have to deal with an increasing student debt that demands to be paid off while jobless. All of these statistics pertain to a very broad category, all college students. There is also a very large debate on whether what college you go to can decide how well of a job you can get. A survey conducted by Gallup on behalf of the Lumina Foundation found that only 9% of business leaders consider where a job applicant went to school to be “very important.” Rather, the amount of industry knowledge that person possessed was overwhelmingly most important, at 84%, followed closely by the candidate’s job skills at 79%. (Bond 6) A similar survey stated that 30% of respondents believed that where they got their degree was “very important.” What about your focus of study? If you choose to graduate while majoring in engineering, you can expect to earn an extra $1.1million compared to the person who never graduated and has been working for 20 years. However, if you choose to pursue the arts you might be surprised to know that you are expected to earn $147,000 less once the cost of education is factored in. (Bond 11)
If we know just how deadly student debt can sting, why does every parent tell their kids they need to get good grades to get into college? “I believe the core reason families are willing to take on such debt is out of fear that their child will face diminished prospects in life if they don’t keep up competitively with their peers,” explained Colin Drake, a personal finance expert and founder of Drake Wealth Management. “Ironically, saddling students with hundreds of thousands of dollars of debt may be the very thing which diminishes their prospects in life.”
I believe that the college education with a degree is well worth it. If you don’t feel like you can afford a big name school, I don’t think you should struggle just to get the university name printed on your diploma. If a small college is a viable option, and you can receive the same degree, then why put yourself in a financial hole with just a shot in the dark at getting out? The statistics back up my view in that employers are not as worried about where your degree came from as we are. The big names and their promise of opportunity are being forced in the brains of our youth with little proof.
A reform of student debt is needed. Even though some of the debt could be avoided, I find the case of Robert Murphy to be unsettling. The thought of my dad or grandfather trying to expand their education and help with my dream, resulting in a lifelong struggle of not being able to fully pay bills for the rest of his life sickens me. I think that the Department of Education could lower their standards for what they define as an “undue hardship” to help out many Americans that won’t be able to receive any help for their debt. I don’t however believe in the idea of free education like many are debating with in upcoming elections because that would lower the value of a degree, lower the integrity of a university, and with free education comes many rules and regulations. The last thing we need to do is create a “high-school part two.” This would result in ten times the number for drop-out rates and would raise the price in private education. If we lived in a perfect world and everyone got along, I’d like to see a middle ground between President Obama’s view on higher education and the Department of Education’s open request of an “undue hardship” exception. This would keep our students in school, out of unmanageable debt, and able to pursue their focus of study directly after their senior year without fear of carrying debt on their shoulders every day.
Works Cited
Bond, Casey. "Why College Isn't Worth The Money." Forbes. Forbes Magazine, 14 Sept. 2015. Web. 13 Feb. 2016.
Connolly, Amy R. "Obama Administration Urges No Bankruptcy Relief for Student Debt." Obama Administration Urges No Bankruptcy Relief for Student Debt. UPI, 21 Oct. 2015. Web. 09 Feb. 2016.
"Ensuring That Student Loans Are Affordable." The White House. The White House, n.d. Web. 09 Feb. 2016.
Rhode, Steve. "Department of Education Reaches Decision About Student Loans and Bankruptcy." Department of Education Reaches Decision About Student Loans and Bankruptcy. TheHuffingtonPost.com, 09 July 2015. Web. 09 Feb. 2016.
Sparshott, Jeffrey. "Congratulations, Class of 2015. You’re the Most Indebted Ever (For Now)." Congratulations, Class of 2015. You’re the Most Indebted Ever (For Now). The Wall Street Journal, 8 May 2015. Web. 13 Feb. 2016.
RHET 1312
Instructor Beavers
Exploratory Argument Essay
January 12, 2016
Bankrupt but Educated
The same broken record plays in our youth starting in kindergarten and continuing in high school. We all heard from someone or another that college was the way to a good life. Wasn’t that one of the reasons we even cared about education in the first place? College can make or break you, and that’s something we can’t just sit back and watch while taking no action. In almost each case, every young man and woman decides to either pursue college or try out the work-force at an early age. There’s no telling who will be more successful or who will drive the nicer car, but times have changed and there is no guarantee to the American dream anymore.
I will be addressing the topic of student debt and how or if it should be altered. I will give three main sources and their differing viewpoints: President Obama and Vice President Joe Biden give their opinion on how they think that student debt should be handled, the Department of Education gives statements regarding student debt in a stubborn court trial, and the statistics provided by Casey Bond and Forbes are laid out in order to show us whether college is worth the whole ruckus in the first place.
Last year President Obama gave a goal for America to strive for. He wanted every student to have hope in extending their knowledge and opportunity in the workforce by being able to go to college without the fear of their own financial problems. Obama’s stated solution is as follows: “Let's tell another one million students that when they graduate, they will be required to pay only 10 percent of their income on student loans, and all of their debt will be forgiven after 20 years – and forgiven after 10 years if they choose a career in public service, because in the United States of America, no one should go broke because they chose to go to college.” (White House 1)
President Obama feels as though it is unfair for a student to be in outstanding debt after following up with a degree and entering in a “lower-paying public service career.” The debt can be equally as burdensome for someone who suffers from unemployment after acquiring a degree, endures serious illness, or even for a college drop out. If we honored President Obama’s idea to limit payments to 10 percent of an annual income, students borrowing would not pay a penny over 10 percent of what they earn, assuming that they make at least $16,500 a year. If this law passed, more than 1 million students could take advantage. Forgiveness after 20 years of payments made on time would sound like a dream to many Americans. That’s exactly what President Obama has in mind, freeing many people of a debt that seems insurmountable.
In the recent case of Robert Murphy, a 65 year old man sought after filing bankruptcy in order to relieve himself of student loans. The Department of Education filed to a bankruptcy court to not allow this to be approved. Murphy had accumulated more than $220,000 of debt owed just from the federal student loans he took out alone. Murphy pled that he could work for as many years as his age would allow and he would still not be able to pay off these loans. However, court documents revealed the statement, “No student debtors should get a break unless there is a certainty of hopelessness with circumstances that have a total incapacity to change.”
A person is not confined to their current economic status. Some examples of a change in circumstances include a decrease in the number of dependents in a household that need to be provided for, the person’s spouse may enter the workforce to reduce the load carried, or an inheritance or outside gift might be redeemed. The Department of Education argues that “There are strong grounds for maintaining different standards for federal student loans." They also added that “Federal loans are not underwritten, have generous terms and protections, and the payments can be limited based on income. Private student loans, by contrast, are underwritten and most do not have a built in income- driven repayment plan." (Connolly 4)
The Department of Education sees that their system is fair and that the student is to blame if they are found in outstanding debt. With their “generous terms and protections” and flexible payments, no student should find themselves in a hole too deep. The Department of Education is not however, the party that does not have an absolute care in the world for consumers that have found themselves in debt. They are struggling to find a balance between collecting debts versus allowing debts to be discharged. (Rhode 3) The attorneys do provide a fair solution, stating that they would consent to discharging some student loan debt if and only if there are “undue hardships.” To constitute for an undue hardship, a person would have to fit into a category such as uncontrollable bankruptcy, mental impairment, or be a veteran with a disability. “(A) Borrower obtains student loans in order to complete a Master's degree. Upon graduation she starts working and making payments. A few years after her graduation, her child becomes seriously ill, with no prospect of recovery, requiring round-the-clock care. The child's illness is followed by a divorce, with no child support or alimony forthcoming. This set of circumstances makes the borrower unable to work full-time due to child care obligations. She works part-time, bringing in only a fraction of her full-time income. Her child's medical expenses are also extremely high.” (Rhodes 18) This is also an example of an undue hardship that constitutes an income-driven repayment option.
With the average student debt in 2015 creeping up to a little over $35,000 (Sparshott 3) many Americans wonder just how useful a degree is. That number is nearly twice what a degree cost years ago. “The growth of student loan debt is being compared to the recent housing crisis because of the significant growth of subsidized lending,” said Bryon Spicer, president of Spicer Wealth Management in Dayton, OH. “Just as the mortgage lending boom pushed home prices up, student loan lending has put upward pressure on tuition.”
College graduates with four-year degrees can expect to earn about $1 million more than high school graduates over their lifetimes, according to the U.S. Census Bureau. A graduate degree adds another $400,000. While those numbers sounds well worth it to us all, you also have to factor in that students with just a high school diploma have at least a four year head start into the workforce, and most importantly no student debt. The sad truth is that even with a degree, there are still many that find themselves unemployed. If that person is like many in the same situation, they now have to deal with an increasing student debt that demands to be paid off while jobless. All of these statistics pertain to a very broad category, all college students. There is also a very large debate on whether what college you go to can decide how well of a job you can get. A survey conducted by Gallup on behalf of the Lumina Foundation found that only 9% of business leaders consider where a job applicant went to school to be “very important.” Rather, the amount of industry knowledge that person possessed was overwhelmingly most important, at 84%, followed closely by the candidate’s job skills at 79%. (Bond 6) A similar survey stated that 30% of respondents believed that where they got their degree was “very important.” What about your focus of study? If you choose to graduate while majoring in engineering, you can expect to earn an extra $1.1million compared to the person who never graduated and has been working for 20 years. However, if you choose to pursue the arts you might be surprised to know that you are expected to earn $147,000 less once the cost of education is factored in. (Bond 11)
If we know just how deadly student debt can sting, why does every parent tell their kids they need to get good grades to get into college? “I believe the core reason families are willing to take on such debt is out of fear that their child will face diminished prospects in life if they don’t keep up competitively with their peers,” explained Colin Drake, a personal finance expert and founder of Drake Wealth Management. “Ironically, saddling students with hundreds of thousands of dollars of debt may be the very thing which diminishes their prospects in life.”
I believe that the college education with a degree is well worth it. If you don’t feel like you can afford a big name school, I don’t think you should struggle just to get the university name printed on your diploma. If a small college is a viable option, and you can receive the same degree, then why put yourself in a financial hole with just a shot in the dark at getting out? The statistics back up my view in that employers are not as worried about where your degree came from as we are. The big names and their promise of opportunity are being forced in the brains of our youth with little proof.
A reform of student debt is needed. Even though some of the debt could be avoided, I find the case of Robert Murphy to be unsettling. The thought of my dad or grandfather trying to expand their education and help with my dream, resulting in a lifelong struggle of not being able to fully pay bills for the rest of his life sickens me. I think that the Department of Education could lower their standards for what they define as an “undue hardship” to help out many Americans that won’t be able to receive any help for their debt. I don’t however believe in the idea of free education like many are debating with in upcoming elections because that would lower the value of a degree, lower the integrity of a university, and with free education comes many rules and regulations. The last thing we need to do is create a “high-school part two.” This would result in ten times the number for drop-out rates and would raise the price in private education. If we lived in a perfect world and everyone got along, I’d like to see a middle ground between President Obama’s view on higher education and the Department of Education’s open request of an “undue hardship” exception. This would keep our students in school, out of unmanageable debt, and able to pursue their focus of study directly after their senior year without fear of carrying debt on their shoulders every day.
Works Cited
Bond, Casey. "Why College Isn't Worth The Money." Forbes. Forbes Magazine, 14 Sept. 2015. Web. 13 Feb. 2016.
Connolly, Amy R. "Obama Administration Urges No Bankruptcy Relief for Student Debt." Obama Administration Urges No Bankruptcy Relief for Student Debt. UPI, 21 Oct. 2015. Web. 09 Feb. 2016.
"Ensuring That Student Loans Are Affordable." The White House. The White House, n.d. Web. 09 Feb. 2016.
Rhode, Steve. "Department of Education Reaches Decision About Student Loans and Bankruptcy." Department of Education Reaches Decision About Student Loans and Bankruptcy. TheHuffingtonPost.com, 09 July 2015. Web. 09 Feb. 2016.
Sparshott, Jeffrey. "Congratulations, Class of 2015. You’re the Most Indebted Ever (For Now)." Congratulations, Class of 2015. You’re the Most Indebted Ever (For Now). The Wall Street Journal, 8 May 2015. Web. 13 Feb. 2016.