By: Alexandria Pendergast
Student loans is a major issue in the United States. The problem is how people have to pay back student loans, it is causing massive amounts of debt in the people who go to college. Now there are two types of student loans private student loans and federal student loans. So unlike federal student loans, private student loans are through companies like Capital One. These are usually gained through applying for a loan, just like any other loan through a bank, you need all your pertinent information and a co-signer. There are some differences between private and federal loans, but the main one is their interest rate. All federal student loans have a fixed interest rate which Congress sets the interest rate every award year. While private student loans interest rates are all over the place depending on cred score and companies. So the main problem with federal and private student loans is the repayment options. With international students, once they leave the country, its impossible to track them down and get them to repay student loans. So many dollars are wasted on international students who just leave the country and leave all that debt behind. This is only in certain countries that are coming here. Now local students still have problems with repaying student loans, they end up paying thousands of dollars just in interest. Also if they lose their job or can’t pay back then their loan will go into default. This makes are so they rack up 10s of thousands of dollars in debt. The reason this happens is that the federal government outsources their federal loans to private companies. These private companies are the reason the interested and default are so high if something happens. So this is one thing I have learned as a student, do not default or else you will pay significantly more on student loans than you ever thought possible. This is a major issue that many people in the United States face today.