Economy

What Student Loans and STDs Have in Common

October 27th 2014

By:
Lindsay Haskell

A CollegeHumor video raises awareness of the dangers of a widespread epidemic that is affecting 42% of 18- to 29-year olds today: student loan debt.

Through the lens of an STD Public Service announcement, CollegeHumor underscores not only the prevalence of student loan debts, but also its detrimental long-term effects, "Almost half of all Americans between the ages of 18 and 22 are fiscally active. Many do not understand the risk they are taking when they contract a student loan ... Even if not exposed to student loan debt directly, they can be transmitted by legal marriage ... It is possible to live an active, healthy, fulfilling life with student loan debt. Just not for very long."

 

 

And as the video also illuminates, It's not just one individual who is harmed by student loan debt - it is the economy as a whole. With the burden of debt weighing on 20-something's shoulders, they will be less likely to contribute to the economy, with small things such as going out to dinner or to the movies, to bigger items, such as cars or houses. With this lack of economic spending, combined by with the fact that 13.7% of college graduates who began repaying their student loans in 2010 defaulting in 2013, there is a lot of work to do. 

One solution? Senator Elizabeth Warren's "Bank on Students Act," which would allow private and federal student borrowers to take advantage of market interest rates as low as 3.86 percent. According to the White House, the bill could save borrowers on average $2,000 over the life of their loan. A report from the Center for American Progress also stated that "refinancing [only] federal student loans with an interest rate above 5 percent would result in a savings of $14 billion for individual borrowers in 2013 and pump $21 billion into the economy in the first year alone."

You can learn more about Senator Warren's legislation HERE.

And you can sign our petition in support of student loan refinancing HERE.