Sample Essay The millennial should be forgiven their student loans

The millennials should be forgiven their student loans

Introduction

Generations that enter the job market during economic recessions usually face myriad economic challenges. In most cases, the least qualified people in these generations do not secure jobs easily because unemployment rate is usually higher than the normal rates (Klobuchar 1). In addition, the few that secure jobs during such a time find it challenging maintaining those jobs because the high inflation rates usually affect their expenses.

The millennials are among the generations that have entered the job market during economic recession and as expected, this generation is experiencing economic challenges. Although not all of the millennials are experiencing economic challenges, it is true that majority of these people are in great economic debts. First, almost every one of them has an outstanding high student loan emanating from the high cost of education experienced during the last decade (Vedder Para 6). Second, majority of millennials are yet to start investing in long-term projects and they are yet to start forming households (Klobuchar 6). This is risky and dangerous to our nation that relies heavily on professionals for economic development. Therefore, for four reasons, the government should consider forgiving millennials their student loans so that they can get started in their lives easily and start building our economy.

Historical background

About a decade ago, securing a well-paying job as a graduate was not a big problem. However, in the recent past, securing such a job has become an economic challenge for many university graduates (Brooks Para 5). This means that it is no longer economical to spend a large sum of borrowed money on presumption that one will repay it after completing education. Nonetheless, millennials have spent such a huge sum of money hoping to secure well-paying jobs and repay their loans, but they are yet to secure such jobs five years down the line (Archer Para 3). From an economic viewpoint, university education is far from benefiting millennials in terms of rewarding them with good jobs as expected.

About a decade ago, education was cheaper than it is today and even if it was not as low as in the 1970s when the cost was almost the lowest, it was significantly better than it is today (Archer Para 3). Currently, most graduates end up with about US$60,000 student loan to repay at the time they graduate. Others end up with higher loans depending on the universities they attended to enhance they job marketability. A decade ago, the average student loan was about US$30,000. In spite of this difference, graduates are not sure of securing jobs after they graduate as they were ten years ago. In addition, the kinds of jobs graduates secure nowadays are not well paying even if graduates hang onto them for the sake of repaying their loans. Accordingly, millennials are just toiling going nowhere even after spending huge sums of money on education. In relation to this fact, economists should urge the government to forgive millennials their student loans.

Reason and evidence

The first reason why the government should consider forgiving millennials their student loans relates to the unemployment rate witnessed between 2008 and 2013. If you look carefully, you will notice that this rate was very high when most of these people were looking for jobs. Indeed, data from the bureau of labor statistics demonstrates that the rate of unemployment started increasing in 2008 and reached its peak in 2010/2011. Although some millennials entered the job market before the onset of the downturn, majority of them had not done that; thus, they joined the job market during and after the downturn (Klobuchar 1). From an economic viewpoint, people that enter the labor market during the recession tend to experience numerous economic challenges than their counterparts that enter the job market during the boom. The millennials were not exempted from this fact because as it can be seen from the table below, the rate of unemployment was at its peak during and after the recession. This means that the millennials were unable to secure employment during and after the recession because majority of the companies were either not recruiting new people or were firing some of their newly recruited employees.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2005 5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 5.0 5.0 4.9
2006 4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4
2007 4.6 4.5 4.4 4.5 4.4 4.6 4.7 4.6 4.7 4.7 4.7 5.0
2008 5.0 4.9 5.1 5.0 5.4 5.6 5.8 6.1 6.1 6.5 6.8 7.3
2009 7.8 8.3 8.7 9.0 9.4 9.5 9.5 9.6 9.8 10.0 9.9 9.9
2010 9.8 9.8 9.9 9.9 9.6 9.4 9.4 9.5 9.5 9.4 9.8 9.3
2011 9.2 9.0 9.0 9.1 9.0 9.1 9.0 9.0 9.0 8.8 8.6 8.5
2012 8.3 8.3 8.2 8.2 8.2 8.2 8.2 8.0 7.8 7.8 7.7 7.9
2013 8.0 7.7 7.5 7.6 7.5 7.5 7.3 7.2 7.2 7.2 7.0 6.7
2014 6.6 6.7 6.6 6.2 6.3 6.1 6.2 6.1 5.9 5.7 5.8 5.6
2015 5.7 5.5 5.5 5.4 5.5 5.3 5.3 5.1 5.1

Source: U.S. Bureau of labor statistics

Source U.S. Bureau of labor statistics

Although the recession is now over, its effects are still evident in the lives of millennials. A recent study conducted by the joint economic commission revealed that most of the millennials were yet to form households back in 2014 (Klobuchar 6). Despite the fact that other factors may influence household formation, economic condition has significant influence on this issue among the millennials. In relation to this fact, the government should consider relieving millennials some of the economic burdens by forgiving them their student loans. If the government will not do this, every American citizen will bear the burden of unsettled student loans that is already at one trillion (Archer Para 5).

The second reason why the government should forgive millennials their loans relates to the problems they experience starting their lives. A critical evaluation of the millennials indicates that they take long before they settle down because their earnings are low and stagnant (Klobuchar 5). This is not a new thing because the salaries for new recruits are usually low compared to the salaries for the experienced workers. However, in spite of this fact, the new recruits that should earn good salaries to service their student loans before they accrue a lot of interests do not earn substantial amount of money to repay their student loans. If anything, majority of them are either earning low incomes or looking for jobs (Archer Para 6). Others are in jobs that do not fit their fields of studies, but they work anyway to repay their loans. Economically, the government is not promoting professionalism because majority of the millennials are not in their fields of studies. Instead, the government is in a way killing professionalism meaning that in the future there will be few professionals in our economy. In order to promote professionalism, the government should consider forgiving millennials their student loans so that they can prioritize working in their professional fields.

The third reason why the government should consider forgiving millennials their student loans relates to the expectation that university graduates should be able to own home and other valuable properties such as cars. In relation to this issue, Archer claims that despite the fact that the 2008 recession taught us otherwise, college education has been the foundation of home ownership. Although things have changed slightly with college education, university graduates are expected to own properties. Nonetheless, this seems to be out of the reach of millennial graduates given that they do not have well paying jobs and they have over $60,000 student loans to repay (Archer para 3). Economically, millennials started their lives facing financial challenges that if not addressed now, then they will land our economy into long-term debts.

The fourth reason why the government should consider forgiving millennials their student loans relates to the high cost of education witnessed in the last one decade. Although it is not unusual for the education cost to increase, the cost has increased at an abnormal rate (Kamenetz Para 6). Accordingly, inasmuch as the government would want to justify the increase, the increase has been facilitated by the expectation that higher education pays in terms of securing good job. However, the recent rate of unemployment witnessed in the last few years and the low salaries that millennials earn necessitate the government to do something about student loans.

Conclusion

The government should forgive millennials their student loans so that they can contribute significantly to our economic growth. The fact that majority of them are burdened by their student loans means that even if they are highly educated, they might not contribute significantly in economic growth. Accordingly, even if the government might want to shy away from addressing this issue with the attention it deserves, it affects our economy; thus, it should be addressed as soon as possible. Economically speaking, if the prospect for jobs were higher than they are today and employers were offering good salaries to millennials, then life would not be difficult for millennials. However, given the fact that prospect for well paying jobs are low and majority of millennials work in poor paying jobs that do not fit their fields of study, then it is high time the government considers forgiving millennials their student loans so that they can contribute in economic development of our nation. If the government does not forgive millennials their student loans, it is likely that majority of these people will struggle repaying those loans and perhaps retire repaying them. In case this happens, then majority of millennial graduates will not be able to own properties or invest in any way. In relation to this fact, the government should forgive millennials their student loans so that they can start investing right now.

Works Cited

Archer, Dale. College debt: necessary evil or Ponzi scheme? 28 Jan. 2013 Web. 9 Oct. 2015. <https://www.psychologytoday.com/blog/reading-between-the-headlines/201301/college-debt-necessary-evil-or-ponzi-scheme>

Brooks, Kim. Is it time to kill the liberal arts degree? 19 Jun. 2011 Web. 9 Oct. 2015. <http://www.salon.com/2011/06/19/time_to_kill_liberal_arts/>

Kamenetz, Anya. Generation Debt: Why Now Is a Terrible Time to Be Young. New York: Riverhead Books/Penguin, 2006. Print.

Klobuchar, Amy. The millennials: economic challenges and opportunities. Joint economic committee, 2014. Web. 9 Oct. 2015. <http://www.jec.senate.gov/public/_cache/files/a1633d07-c22b-4720-aca6-8c2cf0d06f82/millennials-report.pdf>

U.S. Bureau of labor statistics. Databases, tables & calculators by subject. Web. 8 Oct. 2015 <http://data.bls.gov/timeseries/LNS14000000>

Vedder, Richard. Forgive student loans? 11 Oct. 2011 Web. 9 Oct. 2015. <http://www.nationalreview.com/article/279716/forgive-student-loans-richard-vedder>