According to Josh Mitchell, the weak job market has caught some Americans forcing them to line up for the low-cost student loan not for educational needs that would boost their prospects for employment, but to take advantage of the low-cost loans. It has been noted that many are enrolling in these colleges with little intention of getting a degree. Mitchell cites the example of the case of Ray Selent, 30 years, who was unemployed in 2012 and enrolled at Broward County Community College to pursue a degree in theater. This enrollment allowed him to apply for the loan that he used to cover his personal expenses. Mr. Selent stated that the loan prevented him from falling apart (Mitchell 1).
It has been noted that some students have the intentions of getting a degree but opt borrow as much as they can because they cannot find decent jobs that would cover their day-to-day personal expenses. Many students have ended up going into bigger debts (Fossey 6). Schools are restricted by the federal law and education policy from denying funds even when they detect students using the loan on living expenses. The government has allowed students to use portions of their federal loans on grounds that it allows them to devote more time on studies. Trade groups are now pushing for legislation to set lower student loan limits for different categories of students like for example the part-timers to ease the burden.
I totally agree with Josh Mitchell on the topic that low-cost loans entice students to more cash than a degree. The unemployment rates have been soaring in recent years and many people are finding it hard to put food in their tables hence taking out loans to cover their expenses. Although qualified, people are becoming frustrated that they cannot be able to get jobs and good jobs matching their qualifications. It becomes difficult for them to live without jobs or desired jobs (Rothstein & Cecilia 4). Many people opt to go back to school to further their studies and borrow these low cost loans in the guise of using them to cover their educational needs, and yet they use them for their living expenses. The student loans are also easier to get than the normal loans offered by banks. They also have longer repayment periods and lower interest rates thus attracting more students to apply for them. It is also puzzling how students taking part-time classes or online classes would apply for huge sum of the loan and yet their expenses are much less as compared to the regular students. In as much as these low-cost loans entice the students to cash to cash than degrees, it should be noted that there are students out there who genuinely need it for educational purposes. There are those that need these loans to boost their skills and be competitive in the job market and therefore should not be included in the group that utilizes their loan for personal expenses.
Low-cost loans to students are a wonderful idea. The need for education has never been more like in the recent years. For a fact, these loans have seen the soaring of college enrollment numbers (Dynarski 2). The dynamic job market demands people with a variety of skills and knowledge. Providing incentives to boost education levels is a brilliant idea that needs to go on but measures should be taken to avoid the channeling of these funds to personal expenses. The government should work hand-in-hand with higher education institutions to ensure that students take loans would take loans in which a larger part would go to their education needs rather than personal needs. Policies should be formulated to ensure that there are means to monitor the usage of these loans to avoid huge financial burdens. The government should also work towards creating more jobs to avoid situations whereby graduates are forced to go back to schools to get loans to cater for their personal needs.
Works Cited
Dynarski, Susan, and Judith E. Scott-Clayton. Complexity and Targeting in Federal Student Aid: A Quantitative Analysis. Cambridge, Mass: National Bureau of Economic Research, 2008. Print.
Fossey, Richard, and Mark Bateman. Condemning Students to Debt: College Loans and Public Policy. New York: Teachers College Press, 1998. Print.
Mitchell, Josh. "Low-Cost Loans Entice Students More for the Cash Than a Degree." The Wall Street Journal. http://online.wsj.com/news/articles/SB20001424052702304585004579415022664472930
Rothstein, Jesse, and Cecilia E. Rouse. Constrained After College: Student Loans and Early Career Occupational Choices. Cambridge, Mass: National Bureau of Economic Research, 2007. Print.
