The article “The US Should Adopt Income-Based Loans Now” written by Kevin Carey published in the Chronicle of Higher Education on October 23, 2011 highlights an important higher education issue in the United States. The author analyzes whether the government should help students relieve the burden of the student loans by addressing the flaws of the education system in the country. The author states that the government should pay more attention to help the students by ending all the federal loan defaults and moving to an income-contingent loan system by following the examples of other countries. He also states that decades of unjust policies have created a growing class of young male and female students with few prospects of finding a lucrative job. Therefore, they face immense pressure when it comes to returning the college loans due to financial constraints. The author wants to draw the attention of government officials towards this serious issue. The overall goal of the article is to make the audience realize that the student loan system is outdated and unfair, which is why the author is addressing the government officials and people responsible for student policy using an emotional and powerful tone to help the audience realize the importance of the issue.
The author claims that the current student loan system in America is based on greed and injustice. Therefore, the government has to amend the loan repayment procedure to help the students and alleviate their financial struggles. The author states that most graduate students fail to find a good job after graduation since low paying jobs do not allow them to repay the loan even with a fixed schedule. Most students struggle to make enough money in their early years even if they get a job. The students who got jobs during the recession were the most unlucky because they were stuck in low paying jobs. The author draws the attention of policymakers towards the student’s struggles and hardships due to incompetent loan repayment system.
The author also compares the British and Australian education systems where students pay a fixed percentage of their monthly income to cover their loans. Their paychecks are deducted automatically with the payment, which is similar to the income tax payment. Moreover, self-employed graduates are allowed to pay easy quarterly installments as well. Unfortunately, in the United States, the borrowers do not earn much, which is why they struggle to cover the loans. Moreover, the borrowers who live below the poverty line cannot afford to cover the loan completely. Therefore, the government should improve the system to deal with the issues most students face. The author uses the examples of other countries to persuade the reader and make the US authorities realize the ineffectiveness of the current loan system. The author admires the laws of the United Kingdom and Australia where students at low paying professions such as teaching and social work are not discouraged by the system to pay the loan, despite the students’ financial challenges. “Under an income-contingent loan system, like those in Australia and Britain, students pay a fixed percentage of their income to cover their loans. Payment is automatically deducted from their paychecks by the IRS, just like income-tax withholding.” The author wants to identify the weaknesses of the student loan procedure in America by comparing it to the procedure in other advanced countries. Their successful laws prove that the federal government should amend the current system to make the interest rates bearable. The concept works in Australia and Britain that have been using it for years. Therefore, the author shows that the US can use a similar system to reduce the financial burden most students faces after graduating. The author wants the United States to follow these countries and build a successful income-contingent loan system. The claims he made will help the audience to understand his viewpoint and implement the necessary changes to help the students.
The author also provides evidence that shows the effectiveness of the student loan system. He analyzes some historical flaws in the administrative procedures, which negatively affect the current country’s economy. The government used private banks to facilitate students with loans; the Congress abolished the old system of private banks and allowed the federal government to originate all federal loans. The new system makes the students pay more interest rates on loans taken for a longer time. However, such a system affects the taxpayers and can even stagnate the economic growth. The current system also puts a lot of burden on the students who are unable to bear the loan and are charged with fines. Most undergraduates did not took any loans until 1993 when the system of federal loans was created. Now, almost two-thirds of students in the US have a student loan, which often negatively affects their future life. The author also shows that the average load size has increased by 50% during the past few years in the United States, which is why such a system should be changed due to its ineffectiveness.
A recent study conducted in the United States reveals that almost 56% of American borrowers struggle with the repayment of the loan on time. In Britain, by contrast, 98% of borrowers are meeting their obligations, which is why the UK has a more effective system of loans. The author focuses on another federal program called “income-based repayment,” which is a more generous program and the only positive aspect of the American loan system. However, the government should not forget about the income-contingency program. The income-based program started in 2014, but it is an administratively complicated program that requires students to reapply every year. However, it is a good example of income-contingent loans introduced in such countries as the UK and Australia. The government is the only source of federal loans in America, which is why a large number of students have to navigate the pool of interest rates, lenders, terms, and payment schedules to complete their education. The author states that the students fail to repay the loan not because “they are unwilling or unable to pay, but because they cannot get the right check to the right place at the right time.” Therefore, the best solution for this growing issue is to introduce income-contingent loans that would remove all the bureaucratic challenges for the students. Therefore, the government should focus on making the loan repayment system more simple and automatic. The author is hopeful that a similar system would help the college graduates to start a more successful professional life.
The author also states that the current federal loan system for student’s education is a menace to society since it is undermining the peace in a civil society. He uses Chile as an example to show the impact of nationwide protests after student started anger over unjust education system; the whole society was supporting the aggrieved students who became a victim of the unaffordable higher education system. The violent confrontations prove that the nation took the issue seriously; the United States is not far away from violent displays of aggression when it comes to student loan repayments. Carey also admits that introducing the income-contingent loan system in America would not lower down the college fees or education expenses, since the country’s economic policies are the major drivers that force students to take loans they cannot repay. However, the system similar to that used in the UK and Australia will offer a fair solution to the students who will be able to pay their loans in a more efficient way. The author uses the word “humane” to explain the advantage of this system, which helps the government to address the loan repayment dilemma in the current economic system.
The students can pay their debts quickly and make a contribution towards the community in an efficient way if the government makes some changes in the education system. The system can also help the taxpayers to reduce the associated fees of the new. Therefore, the author’s goal is to highlight the benefits of the income-contingency system effectively to help students pursue a successful career. The loans are unavoidable for many students who do not belong to financially stable families. The only effective method to deal with this dilemma is to improve the higher education system by amending the process of loan repayments similarly to Britain and Australia.
The author explains a highly controversial, yet important issue related to the higher education in America related to student’s loan repayment. He uses an engaging tone to highlight the weaknesses and flaws of the current federal loan repayment system, which negatively impacts the financial state of most students in their first few years after the graduation . Many college graduates that receive a loan from the federal government are not able to repay their debts within the specified period, which further increases their debts and interest rates that can negatively impact their careers. The author is making a comparison with the advanced countries like Australia and the United Kingdom where the income-contingency system provides the more simple solution to repay the loan in a specified time and relieve the students from the financial stress. The author supports his claim with comprehensive examples and urges the US government to use the income-contingent loan system. The author focuses on helping the government make better financial decisions in favor of students who are the future of America. The income-contingency system would not eliminate all the problems of students in the higher education, but it could help them lead a more financially stable life.