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What is student debt?

I know what debt is but what's student debt in college?

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James Constantine’s Answer

Hey there Irah,

Let's chat about student debt, shall we? When we talk about student debt, we're referring to the money that students or their families borrow to fund their education, mainly for colleges and universities. It's a hefty financial weight on the shoulders of many folks seeking higher education, especially in places like the United States and the United Kingdom.

Now, let's touch on the role of student loans in college. Student loans are a lifeline for many college students because let's face it, tuition fees and other educational costs can be pretty steep. These loans, often provided by government bodies, private lenders, or the schools themselves, give students and their families the financial boost they need to chase their higher education dreams. And in the long run, this can open up better career opportunities and a higher income.

But student debt isn't without its problems. In fact, it's become a big issue in many countries, with millions of borrowers finding it tough to pay back their loans. This high level of student debt can lead to a few problems:

- Economic burden: The large amounts of money owed in student loans can increase national debt levels, which isn't great for economic growth and stability.
- Individual financial strain: Lots of students find it hard to keep up with their loan repayments, which can delay important life milestones like buying a house, starting a family, or saving for retirement.
- Psychological stress: The weight of student debt can cause a lot of stress and worry for borrowers, affecting their mental health and overall happiness.
- Income inequality: Student loan debt can make income inequality worse, as those with more debt might face longer repayment periods and have less financial freedom.

So, how do we tackle student debt? Governments, schools, and private lenders have come up with a few strategies. These include:

- Offering more financial aid and grants: By giving more financial help to students from lower-income backgrounds, governments can decrease the need for student loans and the resulting debt.
- Income-driven repayment plans: Many countries have repayment plans that adjust based on income levels, making it easier for borrowers to manage their repayments.
- Loan forgiveness programs: Some governments have loan forgiveness programs for certain jobs, like public service or teaching, which can help lighten the load of student debt for those in these fields.
- Education on financial literacy: Giving students the right financial education and resources can help them make smarter decisions about borrowing and managing their debt.

If you're interested in learning more, here are 3 authoritative resources:
- "The State of Student Debt: 2021" by The Institute for College Access & Success (TICAS): This report dives deep into the current state of student debt in the United States, highlighting the problems borrowers face and suggesting policy changes.
- "Student Loan Debt: Comparing the US, UK, and Canada" by The Organisation for Economic Co-operation and Development (OECD): This study compares student loan debt levels and repayment rates in the United States, the United Kingdom, and Canada, shedding light on the global issue of student debt.
- "The Impact of Student Loan Debt on Mental Health and Well-being" by The American Psychological Association (APA): This research looks at the link between student loan debt and mental health, offering valuable info on the psychological impact of this financial burden on borrowers.

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Vamshee’s Answer

The price of college education has skyrocketed in recent years. It's difficult to pay for college & other expenses without taking any loans.

Student Debt refers to money one owes on a loan taken out to pay for college /educational expenses which includes tuition fees, books, dorm or room expenses, miscellaneous expenses during college.

I suggest students can be wise with their spending, be smart with taking loans with less interest rates so you don't take debt that is manageable and pay off easily with job once completing the college.

Start with FAFSA, you can find more information and options at the link below to start with

Hope this helps!