Students’ finances and loan repayment sample essay

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Introduction As the world continues with the quest for greater knowledge, it has become apparent that the cost of that knowledge is becoming quite unsustainable, especially to the poor students, who actually comprise the bulk of humanity. Financing education has remained a challenge, even with government loans. Individual student spending at both public and private universities has risen at a rate higher than inflation, considered by measure of consumer price index. There are several reasons that can account for this state of affairs.

Basically, the technological advancement has been on a very fast pace, calling for the institutions of higher learning to shape up in order to offer courses in tandem with the current global trend. While loan facilities are available in many cases, especially in the developing countries, repaying them remains a challenge. This is made worse by the current financial crunch. This study seeks to introspectively investigate the challenges surrounding student financing as well as the ways in which student repay loans. Rising Cost of Higher Education Vs Low Productivity in the Business Sector.

Perhaps one might wonder how student financing relates to the business sector. Research has shown that there is a very significant relationship between higher education and productivity in the business sector; needless to say that this sector solely depends on the graduates from these institutions to remain viable. Since the 1980s, this relationship seems to have been experiencing serious challenges. As earlier indicated, the expenditure for every student has been rising at a higher rate than the productivity in the business sector.

This has serious consequences on the educational loan repayment trends, because they depend entirely on the graduates finding jobs in the business sectors as well as the government. Of course if the sector is not doing well, it means that there will be fewer employment opportunities, leaving a large pool of unemployed graduates sitting on loans due. These eventually translated into bad debts written off. While this may seem the rational thing for the government to do, it has its own consequences for the ability of the government to continually offer these loans.

On the other hand, the ability to provide loans by the government also depends on the productivity of the business sector of the economy. When the production rate is low, it means that the revenue collected will also be low, which in turn means that loan facilities will be severely curtailed. This interconnectedness has been especially seen during the current global crunch. It has been witnessed across the divide, that governments have had to come up with stimulus packages, in order to prevent the business sector from collapse (Kane, 1999).

This means that in the near future, it is highly unlikely that the loan repayments will be very impressive, because there are no jobs, and one has to work in order to be able to repay. Huge Gap between Public and Private Universities The overall student expenditure at the private universities is higher than at the public university. This in turn translates into better remuneration for faculty staff. This substantial difference in spending, especially on the faculty members, is bound to provide for huge differences in the quality of education.

As a matter of fact, a number of indicators point to the fact that there is already a visible difference in the quality of graduates from both private and public universities. Student’ accession to higher education in the private universities is actually a major challenge to many, due to the rising poverty levels (Kane, 1999). This means that even where many of the students have access to a bit of finances, they are forced to attend public universities, because they are relatively cheaper, but in the end they end up with lower quality as compared with students from the private universities.

Even where public universities are cheaper than the private ones, they tend to be more expensive than what most parents can afford, especially in the poor countries. Possible Measures to Improve the Situation As the global economies emerge from the devastating mess of the recession, everyone seems to appreciate the fact that not much may come forth in government funding, at least in the meantime. However, it is the responsibility of these governments to ensure that the causes of unproductivity in the business sector are sufficiently addressed.

There is no possibility of a single solution to this problem, because as discussed, this is a network of interconnectedness. In order for the students to have access to finances, and be able to repay their loans, the various sectors of the economy must function properly. This means that the government has to put measures in place to ensure institutional efficacy. Conclusion The challenge of being able to finance education is an existential one. It is likely to be around for a number of years to come, if something is not urgently done.

In many countries, students repay their educational loans through their employers. This seems to be the best way, although the main challenge comes when these young graduates cannot find jobs. It is important therefore, that the governments come up with employment programs in order to ensure that everyone who completes college finds a job. Proper research should be done in order to establish what such programs would entail, and how they would be implemented. This has to be done in collaboration with the private sector, because the government alone cannot possibly afford employing every graduate on the list.

The government should also ensure that there is a follow-up on those advanced loans, through an efficient database, in order to ensure that they repay all their loans to the full. Governments should also ensure that every aspect of the economy is sufficiently regulated in order to cushion its own from recession as the one witnessed.

References Kane, T. J. (1999). The Price of Admission: Rethinking How Americans Pay for College. Washington, D. C. : Brookings Institution.

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