Dara Zucker is an alumnus of Carthage College in Kenosha, Wisconsin, USA. The 28-year-old said her life was on hold. He took a loan to finance his studies. Graduated in Psychology in 2016. Since then, he has been paying the loan installments every month. But there is no name of debt repayment; It is only increasing.

“I feel like life is stuck,” Zakar told Al-Jazeera. He also said that he took a loan of 35 thousand dollars for his studies. He now owes $39,000 despite making monthly payments.

  • According to The Education Data Initiative, tuition fees for four-year courses at public universities in the United States increased by 31.4 percent between 2010 and 2020.

Such a situation is not only for Dara Zakar, but for many students studying in colleges and universities in the United States. According to data from the Federal Reserve Bank of St. Louis, student loan debt across the United States is approximately 1.75 trillion dollars; In 2006 which was 481 billion (48 thousand 100 crore) dollars. US student debt is the highest in the world.

As America’s student loan crisis continues to grow, borrowers, policymakers and economists agree that something must be done. But exactly what action needs to be taken remains debated.

At the start of the Covid-19 pandemic, then-US President Donald Trump’s administration suspended interest on student loans. Later, when many businesses were closed due to the lockdown, loan repayments were suspended. Then President Joe Biden implemented his election promise of ‘instant loan forgiveness of up to $10,000’ for every student. Its term was extended several times.

However, the moratorium on loan repayment ends this August. If Biden does not extend the term, 45.4 million (45.4 million) student loan borrowers are expected to start repaying their loans on a monthly basis starting September

  • A student in the United States has to pay an average of 393 dollars (about 40 thousand in Bangladeshi taka) per month in student loans.

Zakar said that he used the opportunity of loan repayment moratorium to help disabled parents in shopping for groceries. He works as a business development representative in a private company. He was recently promoted. He was trying to turn around a bit. Resuming repayments now means that his salary-based monthly repayments will double to $220 (about Rs. 22,000).

In an interview, Zakar said, ‘I am grateful for my job and salary. But the reality is, even if I am able to repay the loan, I cannot afford to buy a house or get married.

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According to research group The Education Data Initiative, tuition fees for four-year courses at public universities in the United States increased by 31.4 percent between 2010 and 2020. However, in many countries such as Germany, Iceland and Sweden, tuition fees are fixed, or completely free. A student spends an average of $35,551 a year on a four-year course at a university in the United States. Expenditure categories include tuition, miscellaneous fees, residence hall fees, books, other expenses—says the National Center for Education Statistics.

A student’s eligibility for financial aid at a college or university in the United States is determined by the respective college authority. In this case, the authorities consider the personal ability to bear the cost of his education, the ability of the family, etc. Later the concerned student may be eligible for federal grants, subsidized loans, work opportunities. After that, the student can apply for a loan to cover the remaining cost of the study.

Many economists who spoke to Al Jazeera agreed that universities and other educational institutions need to do more to educate students about student loans and the different ways to repay those loans after graduation.

An example can be given in this case of Zakhar. The mode of payment of student loan installments he chooses is based on the borrower’s income. Such installments are determined based on the borrower’s salary. However, it increases the repayment period. As a result, the amount of interest increases naturally.

According to Christian Deritis, an economist at Moody’s, a New York-based research firm, “I think young people are in a really difficult situation. Many of them have no idea what their debt burden really is and how realistic their dream of a six-figure salary is after graduating from college/university.’

According to a recent study, after college and university life, students in the United States think that they will receive an annual salary of approximately 130,880 dollars in their first job. But the actual picture is different. It has been seen that after entering the job after graduation, one gets an average salary of 55 thousand 260 dollars a year.

According to the calculations of the Federal Reserve Bank of New York, the dependence of the residents of the United States on the use of credit cards is increasing day by day. In the three months from April to June of this year, 4,600 billion dollars have been transacted using credit cards in the country. Inflation has also increased in the country. The American investment bank Goldman Sachs says that people have put their hands to the money saved during the corona to deal with the situation.

Economist Christian Deritis thinks that the default will increase very soon in such a situation. According to him, many borrowers were in trouble when the government suspended repayment of education loans. There is a danger that they will become defaulters in the future.


This debt will not go away.

Zucker believed that Biden would forgive part of his student loan. This is why he supported Biden. Zakir told Al-Jazeera that he wants the US president to do more about his campaign promises.

This young student claims that Biden should also waive interest on all student loans. And the amount of interest that he and other students have paid on the loan should be calculated and deducted from the original loan.

According to the US-based research institute MajorOne, the federal government currently pays 90 percent of all education loans in the United States. This means, the main lender of education loans is the government. Since this money is going from the government coffers, it can be said that this loan is actually being paid by the US taxpayers. As a result, when the loan defaults or is forgiven, the taxpayers have to bear the burden.

Lindsey M. Burke, director of the Center for Education Policy at the Heritage Foundation, a Washington-based research institute, believes that the decision to waive student loans is wrong. He said, ‘Corona epidemic has affected everyone. Graduates were less likely to be unemployed during the pandemic, with many having to work from home. So the plan to waive student loans by avoiding those who were at greater risk is purely political.

Lindsay M. Burke said student loan forgiveness doesn’t go away. For US taxpayers, this debt relief means they will have to pay more taxes or face inflation. Now, hoping for a waiver, students will take out more loans and seek admission in expensive colleges.

Economist Christian Deritis thinks a lot can be done about how students get loans. He said, “You can say, the US government can put restrictions on student loans and not give more than a certain amount of loans.” For example, a loan of up to 30,000 dollars can be taken or you have to enroll in a less expensive educational institution or you have to work alongside your studies.

“It didn’t take me long to realize one important thing is that student loans in the United States are not like any other loans,” said Zucker, a psychology student. I think people are avoiding it.’ But education loans do not spare anyone.

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