Student Loan Debt: Thesis Statement

Attention: Think about that time when you did not have enough cash on you when you were with your friend and they just covered for you. Not a big deal, right? You probably venmoed them back or paid for the next time. Now, what if you needed to pay tens of thousands of dollars? You would probably take out a loan and work hard to try to pay it off. (AA)

Transition: Many college students are faced with this problem when they pay tuition and they are unaware of the options that are available to them to help reduce their costs.

Problem: College tuition has been rising, and it puts students like us in debt after graduation.

The costs of college continue to rise year over year.

Universities have been getting more expensive because of several factors: the increase in demand for higher education, an insufficient number of faculty, and a lack of funding.

According to Forbes in 2018, the average annual cost of a four-year university is $26,120 with a total cost of $104,480. In 1989, it would have been a total of $52,892 after adjusting for inflation.

The cost has more than doubled in less than three decades. (AA)

On average, that would be a 2.6% increase in tuition costs every year.

Student loan debt continues to increase and is getting more difficult to pay off.

After housing debt, student loan debt is now the largest debt Americans owe at $1.4 trillion.

CollegeBoard statistics show that the average amount borrowed for a college graduate in 1983 was $746, or $1,881 in today’s money. (AA) Contrast that with the average amount of $37,172 borrowed for a college graduate in 2017.

As this happens, wages have continued to stagnate. The Federal Reserve Bank of St. Louis reports that the average growth per year in salary was 0.3% from 1989 to 2016.

As a result, Americans have been struggling.

The Washington Post in 2019 reports that young adults cannot afford to buy a house or save for retirement due to student loan debt.

Student loan debt made it more difficult for 400,000 families to qualify for a mortgage or save up for a down payment

With student loan debt, people were only able to save half as much for their 401(k) compared to those without student loan debt.

Transition: So how can we mitigate some of that debt?

Solution: To reduce student loan debt after graduation, we should apply for FAFSA.

Let me explain what FAFSA is.

FAFSA stands for the Free Application for Federal Student Aid and is used by students to help determine eligibility for financial aid for college.

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The US Department of Education states that you will receive a Student Aid Report with your Expected Family Contribution, or EFC, after filling out your FAFSA. Based on the information in your FAFSA application, you may receive a Federal Pell Grant, which does not need to be repaid.

Over a third of high school graduates did not submit a FAFSA application.

Even if you do not qualify for federal financial aid, your FAFSA information may still be required to receive other non-federal financial aid programs like scholarships or college award packages.

FAFSA applications can help significantly reduce student loan debt.

According to CNBC in 2019, undergraduate students received an average of $8,440 in federal, state, college, and private grants.

If you are an Illinois resident attending the University of Illinois, the admissions office estimates your total expenses per year to be no more than $36,394. That means the average student here would be able to reduce their tuition by 23%. (AA)

You may think you do not need to submit an application for FAFSA because you will not receive any money or that it takes up too much time, but that is not true.

According to a 2016 article on NerdWallet, over $2.7 billion in aid in total was not taken.

More than $97 million in total Pell Grant money was available for 26,527 Illinois students. (AA)

The average time it takes to complete a FAFSA application is 21 minutes, according to the Department of Education.

It is even simpler now that the application auto-fills the tax information that your family provided the IRS with.

The application opens in October, which gives you more time to find the correct information and fill it out.

Visualization: Spending a little extra time to fill out your FAFSA application will help reduce stress in the future.

Receiving grants and scholarships will help lower the total cost of college. Imagine being able to begin saving money for retirement, while your peers are still struggling to pay off their student loan debts. You would have more spending money to go on vacations or splurge on luxuries or provide for your kids.

You would be a step ahead of others at every stage of life in the future.

Transition: So what can you do right now?

Call to action: When you go home, fill out the FAFSA application if you have not done so already.

Go to studentaid.ed.gov and click “Start here.”

Fill out all the necessary information and ask your parents if you are unsure.

You may be eligible for federal aid or other scholarships.

If you start now, you will have less to worry about in your future.