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Create a new document and edit with others at the same time -- from your computer, phone or tablet. Get stuff done with or without an internet connection. Use Docs to edit Word files. Free from Google.

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These sources explain how the current nationwide student loan crisis could eventually become very severe, and explain in small detail a possible solution that I will go into more detail about in my paper.

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These sources explain the current student debt for students nationwide. They go into detail on the individual perspectives and ideas on the topic, and focus mainly on the now.

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These three sources are important because they all show trends from when student debt became a problem and how they paved the way to our current situation. These sources show the heavily influenced debts first stared.

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Approximately three-quarters of federal student loans are guaranteed and one-quarter are direct. In the guaranteed loan program, a 40-year-old system, banks lend students money and profit from the interest payments while the government guarantees the loans against default and makes subsidy payments to the banks.

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ERIC - Straight Talk on Student Loans. PPI Policy Brief, Progressive Policy Institute, 2004-Sep

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The federal government provides student loans for college and graduate school in two ways: by: (1) guaranteeing bank loans; and (2) by lending directly to students. Approximately three-quarters of federal student loans are guaranteed and one-quarter are direct.

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Technology and federal regulations seem to be doing more harm than good. Students apply for loans on the same form they apply for grants, which can downplay the high stakes of borrowing. There are also only minimal federal requirements that students receive in-person financial counseling. They can simply read the terms of the loan online, which is where they also sign the master promissory note. The process takes about 20 minutes, says Cynthia Grunden, associate vice chancellor of student financial services at City Colleges of Chicago. “They’re going to take out that loan without thoroughly understanding that decision,” Grunden says.

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Lack of Safeguards, Knowledge Drives Spiraling Student Debt: EBSCOhost

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Many students opt out of attending college because they cannot afford tuition costs and fees; others do not see a four year degree as a significant reason to overburden themselves with student loans. But the competitive global economy of the future will demand some level of post-secondary education, and study after study has documented the importance of a four-year degree to long-term wealth creation. Young people in the United States should not be hamstrung from the start of their working lives because they are trapped by unreasonable debt. The decision to pursue higher education should pay dividends for all members of U.S. society, not merely the banks or the government.

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Lending is growing outside the confines of the traditional, heavily regulated banking system, by entities like private equity firms, hedge funds and mortgage companies. The trend is especially pronounced in the market for home loans, where many mainstream banks still haven’t regained their hunger for risky lending.

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A decade ago this week, Wall Street imploded. Read our special coverage.

The global financial crisis is fading into history. But the roots of the next one might already be taking hold.

Financial crises strike rich countries every 28 years on average. Often, the break between busts is much shorter.

Fast-growing pockets of debt, as in the last time around, look like potential sources of problems. They're nowhere near as big as the mortgage bubble, and no blow-ups appear imminent.

"But what we saw last time around is that things can creep up on you," said Wesley Phoa, a bond-fund manager at the Capital Group. "You can turn around and in three years' time you can go from not much of a problem to a pretty big problem."

Students are borrowing at record levels

The amount of American student debt - roughly $1.5 trillion - has more than doubled since the financial crisis. It is now the second-largest category of consumer debt outstanding, after mortgages.

Public colleges and universities, hurt by state budget cuts, increased tuition. The drop in house values also made it harder for families to tap into their home equity to pay for tuition. As a result, the financial burden shifted to students, who took on heavier debt loads to pay for school.

Many borrowers are already falling behind. During the second quarter of 2018, more than 10 percent of student loans were at least 90 days past due.That was down slightly from a couple of years ago, but higher than the peak for mortgage delinquencies during the last crisis.

Could this spark a new crisis, with student loans playing the role that mortgages played a decade ago? Probably not.

The student loan market is much smaller than the mortgage market. And the main lender is the federal government, so even a surge of defaults would barely touch the banking system, unlike the mortgage meltdown.

The bigger issue is whether growing amounts of student debt may be a drag on consumers. Some think it could be playing a role in the decline of homeownership over the last decade, an important driver of spending in the consumption-led American economy.

Companies are also loading up on debt

After the crisis, central banks slashed their interest rates. Investors moved their money out of government bonds, which were paying essentially nothing. And they piled into corporate bonds, which typically pay slightly higher rates.

American companies were more than happy to satisfy investors' ravenous appetites - and they did so by selling gobs of debt.

There are signs that the borrowing binge may have gone too far. Debt issued by non-financial companies is near its highest levels, as a share of the United States economy, since World War II. In the past, such indebtedness has been followed by a rise in defaults.

Investors are increasingly willing to lend to risky companies

Even in the market for the safest corporate bonds, funds have been flowing to the borrowers that have some of the lowest credit ratings - the category known as BBB. Roughly $1.4 trillion of the debt is currently outstanding, making it the largest single piece of the investment-grade corporate bond market, according to Standard & Poor's.

More than $500 billion of these BBB-rated bonds are just one downgrade away from being junk, according to Fitch Ratings. A wave of downgrades could cause losses for investors, potentially scaring them from lending more. That would make it more expensive for companies to borrow and invest, weighing on the entire economy.

Emerging markets, too, gorged on cheap debt

Developing economies are looking shakier - and, again, a main culprit is corporate debt. The amount outstanding in all emerging markets is now slightly greater than the size of their actual economies.

In China, the ratio of corporate debt to gross domestic product is above 150 percent, according to the Bank for International Settlements. Some Chinese companies are struggling to keep up with their loans as the world's second-largest economy faces pressure. While China has significant financial heft to deal with problems, any issues could prompt jitters in the broader markets.

A key risk for many countries is that much of the debt is denominated in American dollars, as opposed to the borrowers' local currencies. The loans are getting more expensive because the dollar has gained value in recent months relative to other currencies.

In Turkey, the lira's plunge is already expected to unleash a wave of bankruptcies, and the risk of a recession there is rising. In the past, problems in one emerging market have tended to spread elsewhere, creating concerns about the health of the global economy.

And a lot of debt now lurks in the shadows of the financial system

Once again, lending is growing outside the confines of the traditional, heavily regulated banking system, by entities like private equity firms, hedge funds and mortgage companies. The trend is especially pronounced in the market for home loans, where many mainstream banks still haven't regained their hunger for risky lending.

Non-bank financial companies tend to offer loans to borrowers with lower credit scores and higher debt-to-income levels. But their standards are nowhere near as lax as the subprime mortgages that preceded the 2008 bust.

It's much harder for regulators, investors and banks to keep track of where the risks lie in this so-called shadow banking sector, potentially allowing big problems to bubble up undetected.

Another pocket of concern is the fast-growing market for so-called leveraged loans. Banks make these loans to companies, and then sell off slices that are packaged up and resold to investors, like hedge funds, mutual funds and pensions. The market is much larger than it had ever been, with more than $1 trillion of the loans currently outstanding.

Investors are so eager to get their hands on these loans - because they have adjustable interest rates, they perform well when the Fed is hiking rates - that they're accepting lower-quality deals. Some 80 percent of today's institutional leveraged loans are known as "covenant lite" deals, because they offer weaker protections for investors.

So far, defaults in this area have been low, given the strength of the American economy and fat corporate profits. If growth sputters, that is likely to change.

Then there's the wild card: Hackers

Most financial crises are tied to excessive debt. But they don't have to be. In 1999, the financial world was on edge because of fears about the Y2K bug. In the end - whether because widespread efforts to prepare computer systems for the new millennium were successful, or the concerns themselves were overblown - the disaster never happened.

But threats to the technological foundation of the world's financial system have only grown more severe. Devastating cyberattacks are the greatest source of anxiety for big bank executives. In July, when lawmakers asked what risks kept him up at night, the Federal Reserve's chairman, Jerome H. Powell, cited similar fears.

There's no question that hackers are trying to penetrate the American financial system. The number of successful data breaches has been rising.

Banks are rushing to fortify their defenses. The crippling of a major financial institution at the hands of hackers could sow fear and instability across the entire banking system - the same sort of chain reaction that brought financial activity to a halt 10 years ago.

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The Next Financial Calamity Is Coming. Here's What to Watch.

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A decade ago this week, Wall Street imploded. Read our special coverage. The global financial crisis is fading into history. But the roots of the next one might already be taking hold. Financial crises strike rich countries every 28 years on average. Often, the break between busts is much shorter.

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In this paragraph, we will discuss how the current trends might affect the future of student loans, and possible solutions for medical students.

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(EBSCO)
The maximum debt level would have to be somewhat smaller, not only because annual borrowing from private lenders would require that interest payments commence immediately after the loan is taken out but also because, once repayment begins, there is no subsidy for the interest charges, i.e., the market rate of interest is charged.

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Outstanding student loan debt now stands at $1.5 trillion, with 44 million Americans responsible for paying off student loans.

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an alarming number of student loan companies have been fined for illegal practices that add further to the hardship that borrowers face. The combination of these factors is pushing the system into crisis. Another borrower defaults on his or her loans every 28 seconds, joining eight million others already in default; and the consequences are severe, including seized wages, which further drive the debt spiral.

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In this paragraph, we will discuss how the trends have affected medical students now, and the problems they face due to the uprising of the sharp increase in loans and debt.

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From 1999-2009, average tuition at public four-year colleges increased 73%, and in many states, tuition has continued to sharply rise. One reason for this is that state governments have spent, on average, 28% less on higher ed since the recession began in 2008.

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What's Driving College Costs Higher?: EBSCOhost

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Certainly by the 1990s, student loan debt began to skyrocket. In 1993, the average debt of a bachelor’s degree graduate was approximately $9,000; five years later, it was about $15,000. By 2003, it had jumped to approximately $17,500. [...]Well, it's - it may be necessary by some way of thinking.

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For the past two decades, student debt has risen each year. In the last eight years, the number has tripled, culminating in today's shockingly all-time high: according to FinAid.org publisher Mark Kantrowitz, the class of 2013 incurred an average of $30,000 in student loan debt.

Although debt has long been a problem for American students, it has only recently spiraled to this unmanageable level. So what's going on? This article will provide a historical overview of student debt in the United States.

History of Student Loans

The first student loans in the U.S. were offered exclusively to students at Harvard University in 1840; public student loans did not arise until the 20th century. In fact, the U.S. Department of Education (DOE), which was founded in 1867, did not administer federal student loans until the passage of Title IV of the Higher Education Act in 1965 (HEA).

In the two decades prior to the institution of federally-guaranteed student loans, the U.S. experienced a significant increase in college attendance, however, thanks in part to the passage of the GI Bill® in 1944. Fulfilling the need for affordable higher education, the GI Bill subsidized or completely covered the cost of college education for nearly half of America's returning World War II veterans. Since its inception, this program has remained popular over the years; nearly 32% of all male veterans have used it to attend college as of 2009.
* GI Bill® is a registered trademark of the U.S. Department of Veterans Affairs (VA). More information about education benefits offered by VA is available at the official U.S. government website at http://www.benefits.va.gov/gibill.
One year after the HEA was enacted, the precursor to the National Association of Student Financial Aid Administrators (NASFAA) was established. Today, this organization enlists more than 18,000 professionals at colleges and universities across the country to help students access higher education through financial aid.

In 1972, the HEA was amended to ensure education programs whose students were receiving financial assistance and student loans did not discriminate based on gender. By 1976-77, all undergraduate students became eligible for Pell grants. Together, these two popular programs further increased college attendance rates by providing financial assistance to individuals who previously could not obtain it.

However, not all student financial assistance has been beneficial. Signs of trouble with student borrowing began to appear by the late 1980s. In 1986, parents and students had incurred nearly $10 billion in federal student loans - then considered an outrageous amount. That same year, more than one quarter of student borrowers owed more than $10,000 in student loan debt; adjusting for inflation, this is equivalent to over $21,000 today.

Certainly by the 1990s, student loan debt began to skyrocket. In 1993, the average debt of a bachelor's degree graduate was approximately $9,000; five years later, it was about $15,000. By 2003, it had jumped to approximately $17,500.

Today, the average outstanding student loan balance per debtor is roughly $30,000, though one recent study by Fidelity Investments put the figure as high as $35,200. Approximately 20% of U.S. households currently owe student loan debt, as do 40% of people younger than 35. This means an increase of nearly 200% of overall student loan debt (public and private) over the last 20 years. As of 2012, total student debt surpassed $1 trillion.

Contemporary Trends

There is no single reason why student loan debt has gotten so out of hand. Increased tuition costs, reduced state spending, borrower behaviors, and even choice of major all play a role.

First, tuition rates skyrocketed in recent years. From 1999-2009, average tuition at public four-year colleges increased 73%, and in many states, tuition has continued to sharply rise. One reason for this is that state governments have spent, on average, 28% less on higher ed since the recession began in 2008.

Logically, as state spending decreases, it has to be made up - and <a href="https://thinkprogress.org/states-cut-higher-education-funding-increase-tuition-to-avoid-raising-taxes-f748e77fe3ac#.2u9edyrap" target="_blank"">student borrowing has historically helped compensate for the shortfall; in 1987, students only paid about 23% of the cost to fund higher education, but by 2012 their share had increased to over 45%. Since federal loans will not cover the increased costs, many students are turning to private loans.

Another factor is the nation's more relaxed attitude toward borrowing in recent times. It is important to note that students 20 years ago were stricter in their borrowing and graduated with a median debt burden (monthly loan payment as a percentage of monthly income) of only 3.3%. By 2003, the median debt burden of nearly 90% of borrowers hovered around 8%. Prior to 1992, only those students who demonstrated financial need could participate in the federal student loan program; after 1992, many requirements for borrowing from Uncle Sam were relaxed.

There are several other interesting trends that have come to light in recent years, although they don't lend themselves to simple conclusions. One is that students in the Northeast and Midwest tend to have much higher debt loads when compared with their fellow students in the West. One theory to explain this is the significantly higher concentration of students attending private colleges in the Northeast and Midwest. However, since many private nonprofit colleges actually have a lower "net price" (cost of attendance after grants and scholarships are awarded) than public schools, borrowers may actually need to take out fewer student loans than those who attend public institutions.

Another trend to watch is that graduates with liberal arts degrees suffer higher debt burdens. According to a recent report in the Wall Street Journal, the median debt load for graduates of design, music, and art schools in 2010-2011 was $21,576, while the median debt load of graduates from liberal arts schools was $19,445. In comparison, median debt load for students who graduated from research universities was $18,100 during the same academic year.

Sadly, graduates with these degrees often have the most difficulty paying back their loans. In a recent study by Georgetown University's Center on Education and the Workforce, those who graduated with degrees in photography and the fine arts suffered unemployment in the range of 10.1%-11.49%, while others with liberal arts degrees, such as anthropology, English and foreign languages had unemployment rates between 8.1%-12.6%. Likewise, employed individuals with degrees in the liberal arts who have jobs still experience the lowest wages, generally speaking.

The Future of Student Debt

This silver lining in all this is that policymakers, college administrators, borrowers, parents, students, and prospective college enrollees are at least aware of the problem, and many are proposing solutions.

One popular route is to eschew the traditional four-year college in favor of a vocational certificate program. In 2012, manufacturers reported that as many as 600,000 jobs went unfilled because workers lacked vocational skills. In fact, a recent report noted there are 29 million jobs in the U.S. that require vocational skills but not a bachelor's degree, and most award an annual salary of $35,000 or more.

Some solutions look to change the terms of the loans themselves. In addition to locking in low interest rates on federal student loans, some lawmakers are seeking to add provisions such as debt forgiveness for those who have made payments for a period of time, as well as suspension of interest accrual during times of high unemployment.

Another idea, put forward by Senator Kirsten Gillibrand (D-N.Y.), would allow borrowers with student loan debt to refinance at a lower, fixed interest rate, in the same way people refinance their mortgages. Resulting in a savings of an estimated $14.5 billion for borrowers in the first year alone. Sounds like a no-brainer, right?

Wrong. Many don't realize that Wall Street (and thus, lots of people with a 401k) invests in student debt to the tune of $291 billion. Additionally, the Department of Education owns another $600 billion in loan debt; experts predict the DOE will generate a profit of $51 billion from these funds in 2013. With so many powerful interests standing to lose by transferring this money back to borrowers, it's unlikely that a bill like Senator Gillibrand's - which has no co-sponsors - will pass.

No one has a clear idea of what the future holds for education borrowers, but all agree that solutions are needed to ameliorate the student debt crisis. With ever more experts forecasting a burst of the student debt bubble, perhaps lenders and investors will have some incentive to work proactively with borrowers to make student loan repayment easier. In any event, until we act, our young people will continue to face more and more debt on an annual basis.

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Student Debt Part 2: A Brief History of Student Debt in United States

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For the past two decades, student debt has risen each year. In the last eight years, the number has tripled, culminating in today's shockingly all-time high: according to FinAid.org publisher Mark Kantrowitz, the class of 2013 incurred an average of $30,000 in student loan debt.

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 borrowing has gone up every year since 1993. According to the National Center of Education Statistics, average debt began to creep up in 1993, making small jumps from an average of $10,000 per student until it had doubled to $20,000 twelve years later. Then it began to increase very sharply. By 2013, the average debt per borrower hit $30,000.

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Student Debt in the U.S. (Part 1)
This is our first article in a two-part series about the nation's ever-rising student debt levels. The second entry will look at student debt from a historical perspective and explore some of the potential consequences of the debt crisis.
As college costs spiral upwards, unpaid student debt has reached a record high of $1 trillion, slowing down economic growth and causing many young individuals to lose control of their finances. Many politicians, media outlets, and educators are focusing on cuts to state and federal subsidies as the reason behind these astronomical tuition hikes. But while this may be true in cases, it's not that simple.

Paradoxically, many studies have found the opposite to be true: as federal and state subsidies increase, colleges and universities actually charge more for tuition, exacerbating the student debt crisis. Here we will trace the problem back two decades, examine funding trends and college costs to pinpoint what exactly is behind tuition increases.

Student Debt: The Last 20 Years

The rise in student debt is by no means a new phenomenon - borrowing has gone up every year since 1993. According to the National Center of Education Statistics, average debt began to creep up in 1993, making small jumps from an average of $10,000 per student until it had doubled to $20,000 twelve years later. Then it began to increase very sharply. By 2013, the average debt per borrower hit $30,000.

The rise in borrowing naturally correlates with increasing college costs. The average yearly tuition and room-and-board in 1990-1991 was $8,485 at a public 4-year institution. By 2010, that had leapt up 83%, reaching an average of $15,605 per year.

Concern over this upwards spiral is all over the news, as unpaid loans take a major toll on the economy. And many are worried this is just the beginning.

Tuition rates are predicted to rise over the next two decades, with costs hitting $41,228 per year for in-state public tuition and $92,869 for private colleges in 2029. This ridiculous level of debt could not be sustained by parents in stable careers, much less by students with poor financial history. So why is this happening?

Cuts to State Spending

Budget cuts brought on by the recent recession have taken their toll on the American education system, pushing more students and lenders to take up the slack. Incremental cuts have caused education allocations to drop since 2008, with thirty-six states decreasing funds by more than 20%. As a nationwide average, states cut their education spending by 28% from 2008 to 2013, according to the Center on Budget and Policy Priorities.

When states cut education budgets, where exactly does this money end up? The National Association of State Budget Officers (NASBO) has identified great leaps in Medicaid spending, growing from 22.2% of state expenditures in 2010 to 23.9 in 2012. During the same time period, education spending dropped from 20.4% to 19.8%. NASBO projects that funding will become even more difficult to allocate toward education in upcoming years, due to long-term healthcare demands and pensions.

State funding for education may eventually climb out of the recession pit, as legislators anticipate upcoming economic growth. The report by the College Board makes it very easy to see how dramatic rises in tuition mirror sharp increases in federal student aid. The government awarded just around $17 billion in total federal grants (including Pell, LEAP, military, and several others) in 2001. This amount exploded up to $49 billion by 2011. This makes for a 185% increase within a ten-year span.

A very similar trend occurred with federal loans, which jumped from a yearly total of around $47.8 billion to $105 billion over the same period. While enrollment in college-level degree programs rose during this time, graduation rates fell. And unsurprisingly, the number of for-profit secondary institutions also multiplied.

This is a tricky situation. We all agree that deserving students should be granted more, not less, access to higher education and no one wants schools to have to reduce their enrollments or the quality of the educations they offer due to falling budgets. But if we want to lower the burdens on students, schools and taxpayers, we need to focus on allocating federal student aid and loans in a way that isn't accelerating rises in tuition costs.

So if both cutting and raising government funding makes the student debt situation worse, what is the solution? The question is not about raising or lowering spending, but rather how the money is spent. Heaping thousands of dollars in subsidized loans on young borrowers to cover exorbitant education costs is not the answer, but neither is cutting support for important academic research. It's a complex equation, but until it's figured out young graduates are going to be bearing a heavy financial burden.

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This is our first article in a two-part series about the nation's ever-rising student debt levels. The second entry will look at student debt from a historical perspective and explore some of the potential consequences of the debt crisis.

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In this paragraph, we will discuss how student loan trends started, how they impacted us before, and how they have boomed into one of the largest investments for students ever.

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The student debt crisis has skyrocketed in the passed few decades. This is due to the amount of competition within colleges. How does this affect us now, and the possible future for medical students?

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Economic

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                                         RQ:

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                                         RQ:

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With the competitive pressures of becoming a doctor and the increasing burnout, dept, and depression for students pursuing a career in medicine in the United states, should the medical education system be optimized to be less restricting while still ensuring that students will become competent future physicians?

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Medical Student Priorities