The new crown pneumonia epidemic has caused severe damage to the US economy, with the unemployment rate continuing to rise, causing more people to lose their financial resources. This is undoubtedly a heavy blow to Americans who currently hold student loans.
Currently, 45.3 million Americans hold student loans, accounting for 13.7% of the US population. Although the US federal government issued an order to suspend the payment of student loans during the epidemic, this administrative order will expire on January 31 and then tens of millions of Americans will face high student loan debts unable to repay.
Denise graduated from the University of Akron School of Law with a $200,000 student loan debt to be repaid. Although she has worked for many years, her student loan debt has hardly reduced. After the outbreak, her financial situation was even more precarious. Facing the high school loan, Denise worried that she would never be able to repay it.
Denise Ferguson said: “We are the only first country that has these problems with student loans. People are in debt for study. If I win a lottery, it (student loan) can be paid off. But if I can’t, it (student loan) will never be paid off.”
Christo is a student at the University of Missouri. Faced with the huge pressure of a student loan, her parents tried to persuade her to drop out in the last semester. In order to repay the debt as soon as possible, Christo began to look for work everywhere.
She said: “You must know, this is too difficult. To go to class, I must give up my job. And to go to work, I must give up class. I need to pay my tuition. If I don’t, I will be kicked out of school. Unless I work hard to make money, my dream will not come true.”
As the epidemic has caused the economy to continue to be sluggish and difficult to recover in a short period of time, many graduating students are worried that they will not be able to repay the huge debts of school loans after graduation. So many start to consider dropping out of school or working part-time like Christo.
Christo said: “For students who need a full-time job, it may greatly affect your mental health in many ways. Sometimes you are so tired that you feel that you can no longer continue.
In addition to college students, American colleges and universities are also in serious financial crisis and are considering raising tuition fees. The Los Angeles Times reported recently that the government budget cuts caused by the epidemic have led to a huge financial blow to the operations of the University of California, highlighting the need to increase tuition. Experts believe that the increase in tuition fees and the decrease in income have both exacerbated the debt problem of American students.
Holland, Bloomberg Economic News editor, said: “I think there are two aspects. One is that universities have just raised their tuition fees. It is very likely for people to use loans to pay for their expenses, just like housing prices before the real estate bubble in 2008. The other reason, I think, is simple. That is the income growth is not fast enough to cover college expenses after the financial crisis. Americans are not well-paid. In the years before the epidemic, the income has improved, but it is not enough in general.
Bloomberg reported that in 2020, the total debt of student loans in the US has reached 1.6 trillion US dollars. According to the survey, once the student loan freeze order expired on January 31, 60% of student loan borrowers said they would not be able to pay their February loan bills.