Student Loans’ Advantages and Disadvantages

The U.S. is facing an educational crisis – the number of outstanding student loans exceeds the number of car loans, and the debt burden is growing. People are forced to stop saving for retirement, give up buying homes and even medical care to pay off student loans. It is also important to note that billions of dollars in these student loans are owed to people who have already reached adulthood. This is because the rising cost of college tuition began to outpace inflation back in the 1970s (Sherman, 2020). Even a ten percent drop in enrollment means a ten percent market dip that will affect millions of people. After all, such a drop would affect many industries, from financial institutions and publishers to paper and stationery manufacturers. The question of whether the state should continue to support higher education and students attending college requires analysis of all aspects and has no clear, unequivocal answer.

The main advantage of an educational loan over an ordinary loan is that the bank grants a grace period for the period of study in higher education and job search. The financial product is designed to grow the loan load gradually and remains comfortable for the borrower even at the beginning of his career. Borrowers will have to repay the principal amount of the loan after they have obtained an education and obtained a job (Argento, 2020). The bank can extend the grace period for the borrower in case of academic leave for family reasons, maternity leave, or military service. So from the apparent advantages of educational loans, the possibility of obtaining quality education and comfortable lending conditions should be noted.

However, among the disadvantages of this type of state support is the fact that student loan holders cannot be relieved of this debt in bankruptcy. If this situation is analyzed from the perspective of economic laws, student loans distort the market. Government support, or the issuance of student loans, is artificially raising the price of higher education. Due to the growing generosity of the government, colleges and universities have no incentive to lower costs. Many institutions depend on federal student loans to continue their education. Moreover, federal student loans are not conditioned on any sound practical principles. Students pursuing majors, such as engineering or computer science, that are likely to give them high-paying jobs later are just as likely to receive government loans as students pursuing gender studies.

On the one hand, state support for education gives students the opportunity to get prestigious jobs and learn a profession of interest. However, the incredibly high education prices can potentially lead to a crisis within the country due to the inability to pay the student’s debts. An educational loan can be an incentive to study well. This is because if people give their money for something, they subconsciously begin to treat it with more responsibility. However, if students are disappointed in their choice of profession or cannot find a job after graduation, they may have problems paying back their debts, which, of course, creates hardship. The question of whether the state should continue to support this initiative has no clear answer. All the more so because the changes, in case the fears of economic experts are confirmed, will not happen instantly. Moreover, the current education system has been developing for decades. Accordingly, it will also take a long time to change the way things work in this field.


Argento, M. (2020). How defaulting on student loans can impact your first job. Student Loan Hero. Web.

Sherman, E. (2020). College tuition is rising at twice the inflation rate—while students learn at home. Forbes. Web.

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ChalkyPapers. (2023, October 20). Student Loans' Advantages and Disadvantages. Retrieved from


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"Student Loans' Advantages and Disadvantages." ChalkyPapers, 20 Oct. 2023,


ChalkyPapers. (2023) 'Student Loans' Advantages and Disadvantages'. 20 October.


ChalkyPapers. 2023. "Student Loans' Advantages and Disadvantages." October 20, 2023.

1. ChalkyPapers. "Student Loans' Advantages and Disadvantages." October 20, 2023.


ChalkyPapers. "Student Loans' Advantages and Disadvantages." October 20, 2023.