#ragingdebt

   Debt can and may be devastating. It can prevent someone from doing a lot, causing frustration, stress, and many more things that attribute to an unhappy living. Debt’s correlation with poverty, suffering and unhappiness is more than what people believe and indeed has an impact on young adult’s lives. Studies that have investigated several psychological variables show that debt may indeed be part of the issue. Studies show that debt is more common among those with lower incomes and higher outgoings. This means that typically, wealthier families are better able to afford a degree than low income families. 

   “These studies have examined debt, in the sense of involuntary inability to make payments which the payee expects to be made immediately, rather than credit use, which can be characterized as a postponement of payment that is agreed, indeed planned, by both borrower and lender,” (Lee).

   Ever since the 20th century, debt was accepted as part of a modern consumer society and attitudes towards debt have changed radically. Since then, debt has been seen as a cultural norm and has been sustained.

   Studies done at the University of Canterbury show that debt contributes to a change of attitude and financial management issues. Debt can definitely have negative effects on ones mental health. Being low income, paying back obligations such as debt may lead to money management issues due to the poor ability to distribute money properly and in good use. Those with debt are encouraged to not spend, cut down or to spend wisely on luxuries so that paying back debt is a reachable goal. 

   Studies done at University of Aberdeen show that lower socioeconomic backgrounds and postgraduate students have higher debt. “Students who worry about money have higher debts and perform less well than their peers in degree examinations. Some students in this subgroup were also identified by the GHQ and may have mental health problems.”

   Debt contributes to mental health issues because studies found, “that many students undertake paid work to pay for their time at university and they argue that students find it difficult to juggle work and study commitments, with work usually impacting on their social life.” Atitudes towards debt definitely has an effect towards mental health. “Perceptions of their debt impact on mental health: students who perceived their anticipated graduate debt as ‘excessive’ were more likely to be anxious or depressed than students who viewed their anticipated debt as ‘manageable’,” (Cooke).

Cooke, Richard, Michael Barkham, Kerry Audin, Margaret Bradley, and John Davy. "Student Debt and Its Relation to Student Mental Health." Taylor & Francis Online. Taylor & Francis Online, 19 May 2006. Web. 20 Nov. 2014.

Kemp, Simon, and Lyn Boddington. "Student Debt, Attitudes Towards Debt, Impulsive Buying and Financial Management." Psychology.org. New Zealand Journal of Psychology, 1 Dec. 1999. Web. 20 Nov. 2014.

Lea, Stephen E.G. "Psychological Factors in Debt." Psychological Factors in Consumer Debt: Money Management, Economic Socialization, and Credit Use. Economic Psychology, 1 Dec. 1995. Web. 20 Nov. 2014.

Debt can be hard to deal with but here are a few things that can help you act against debt:

1. Emily Warren suggested a bill that would allow students to refinance their loans.

- “The Bank on Students Emergency Loan Refinancing Act, would allow more than 25 million people to refinance their student loans to today’s lower interest rates of less than 4 percent. Warren paid for the bill with the “Buffet Rule” — a minimum 30 percent income tax payment from people who earn between $1 million and $2 million.”

    - This would allow students to pay back their loans at a lower interest, enabling them to payback quicker and at a decreased rate.

    - Unfortunately, this bill was not passed because “Republicans oppose the bill because it would raise taxes on the wealthy"

“Millions of young people are just stuck,” Warren said. “They can’t buy homes, they can’t buy cars … all because they are struggling under the weight of student loan debt.”

“Democrats argue that the $1.2 trillion in student debt in the United States is harming (delaying) economic growth,” says Warren.

2. Apply for scholarships

- Applying for scholarships is easy, getting the reward is the tricky part.

- You can find loans for CU at http://www.colorado.edu/scholarships/

- You can apply for other scholarships on popular websites such as:

- http://apps.collegeboard.com/cbsearch_ss/welcome.jsp

- http://collegenet.com/elect/app/app

- http://www.fastweb.com

- https://www.scholarships.com/about-us/

- http://www.scholarshipmonkey.com

3. Obama’s loan forgiveness plan: http://www.studentaidnow.org

- “The plan was introduced by President Obama  in 2014 due to the increasing number of Americans that are struggling with repaying their student loan debts after college.   The plan is intended to help students who are not fully able to pay the full loan repayment amounts.”

    - Purpose is to clear out standing debt of students that made regular payments on their federal loans for more than 20 years. This is an attempt to free students of their debt burdens so they can focus on obtaining a degree rather than keeping their debt and have it accumulate over time.

4. Income based repayment structure:

    - “The Dynamic Student Loan Repayment Act is an attempt to further reduce monthly student loan payments. Although previous legislation has lowered interest rates, graduates are still paying a higher rate”

       - “It does apply to every loan, is geared specifically to helping those borrowers who are just now entering the workforce and are looking at a monthly repayment that hamstrings their ability to do anything other than go to work and pay off their student loans.”

More ways to avoid debt are by attending a less expensive institution or joining groups speaking up against the unjust tuitions and fees.

Lower monthly payments for those struggling to pay off loans

Income Based Repayment Policy ensures student’s loan payments will be no more than 15% of income while rest is pardoned after 25 years, and congress is in process of making bill that lowers it to 10% and 20 year pardon period.

Can consolidate loan using Direct Loan program and the Federal Family Education Loan, which gives you benefit of only paying 1 lender, would also benefit 0.5% reduction of interest rate.

Healthcare and Education Reconciliation Act increased the maximum Pell Grant to $5,500 and saved taxpayers billions by cutting out banks as middlemen. Because of this there will be over 800,000 additional Pell Grants awarded over the next 10 years.

As a part of a National Organization, CU students have organized their own Higher Ed, Not Debt chapter. They reach out to students in the UMC and discuss what the National Education Association and Higher Ed, Not Debt are doing to help relieve students of their debt. There is an application process while you attend college that once you graduate, some of your loans may be forgiven.

Interviewed several college students on their loans and debt.

I, Megan, personally have 15k in debt in my own name, no cosigner, more than my parents. 

“I have two loans adding up to $3000, but they are in my parents and I will have to pay them back eventually.”

  “I needed my parents to take out the Direct Plus loans to cover the rest of my expenses. Total amount of loans is about 13 thousand dollars. It’s incredibly stressful.” - Kelly

  “I have to work 20 hours a week at Home Depot to pay my tuition on top of keeping up with my grades. I also have loans from my freshman and sophomore year that I will have to start repaying by December of next year.” - Mikhail

   Income-driven repayment plans are designed to make your student loan debt more manageable by reducing your monthly payment amount. If you need to make lower monthly payments, one of the three following income-driven plans may be right for you:

Income-Based Repayment Plan (IBR Plan)

Obama’s new law expands the income-driven repayment plans that are currently available to student borrowers. According to the revised IBR plan, graduates pay a maximum of 10 percent of their voluntary income or the remaining income after they have covered expenses like housing and food. Before 2014, the maximum repayment was 15 percent of the borrower’s disposable income. The Obama Administration estimates that over 1 million students/ graduates will feel relief with reduced loan repayments as a result of this.

Pay As You Earn Repayment Plan (Pay As You Earn Plan)

Income-Contingent Repayment Plan (ICR Plan)

Links for Loan Forgiveness http://www.studentloanforgivenessplans.org/?gclid=CMX9_5zTtcICFe1cMgodxncAeQ http://www.simpletuition.com/student-loans/obama-student-loan-forgiveness/ 

One of the ways to receive loan forgiveness, it by serving in volunteer work (ie AmeriCorps)  http://www.finaid.org/loans/forgiveness.phtml

   Student loans fall under two categories: private and federal. Private are provided by banks, credit unions, state agency or a school. You pay back private loans while you’re in school with a higher interest rate than federal loans. Many first year student’s rely on their parents to be cosigners for private loans because there is a credit check to be approved.

    All federal loans start billing you six months after you stop becoming a full time student (enrolled in 12 credit hours).

    Within federal loans, there are 4 different loans available. Unsubsidized versus subsidized and Perkins and Direct Plus. Similar to a private loans, the Direct Plus loan requires a parent cosigner with a established credit score to be approved. The Perkins loan has the lowest interest rate and it is lended by the school you attend and you make payments to the school. When taking out a subsidized loan, there is less stress. The interest is paid by the government WHILE you’re in school but not after. Unsubsidized loans accumulate interest while you’re in school. Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive.

  "NEA - NEA Home." National Education Association. N.p., n.d. Web. 19 Nov. 2014.