Earlier this year, for the first time in history, student debt reached an appalling $1.5 trillion. Just a decade ago it was $600 billion. This only goes to show us how much this type of debt is crippling the average everyday student. In a lot of cases, if you can’t pay your student loans, you can’t work in your field of choice, making the situation increasingly dire.
The individual numbers get scarier from here. The average grad leaves school about $37,000 in the hole and will spend the next ten years of their lives trying to pay it back, as is the standard repayment plan.
The problem is, due to the economy over the last decade, many graduates left school only to find out that the market doesn’t bear any fruit. 1-in-6 graduates make much less per year than what their debt is worth, meaning they can’t pay their loans back in time and will likely go into default.
Going into default will put a severe hurting on your credit score and can even keep you from being able to re-license in your field. A lot of states have laws that nurses, teachers, and other service-related fields can be denied the opportunity to work if they aren’t current with their loans.
Increased Cost of an Education to Blame
One of the main reasons why we’ve hit this new milestone is a tuition rate increase across the board. As it becomes more expensive to go to school, local and state governments begin to panic and pull out their resources. It’s no longer a sustainable practice to give out loans that push kids into higher education.
Less money from government programs will force them to add to their debt by securing loans. It’s no secret that loan companies don’t make the process easy on students, either. They know they have to pay this money back, so there’s often little give in their demands. Once a student finally gets their debt paid off, a hoard of new students come in.
It’s really become a vicious cycle where you’ll find yourself unable to work and provide for yourself. A record number of millennials are living at home for this very reason. They don’t have the credit (or the job) to make it out on their own.
Colleges are partly to blame for exaggerating job placement numbers to make the debt seem worth it. Hey, if you’re virtually guaranteed a job when you graduate, you’re more likely to think it’s a good idea. But reality came crashing down. It was predatory tactics to get you in the door all along. They faked their numbers to feed on people’s desperation to find work.
If you need help with your student debt, contact us here at Financial Helpers. We’ve worked with thousands of students to determine their eligibility for student loan forgiveness and other government programs. To find out more, call us at:
Should Student Debt Be Forgiven Across the Board?
Politicians will tell you that the key to living the American dream is getting a college degree. It’s always been the standard argument for going to college. Student debt is rising to levels that almost make it not worth the effort. In fact, there are plenty of people right now who regret going to college and raking up the amount of debt they have now.
Would you go to college if you knew it would take the next 25 years of your life to pay off the debt? Many didn’t realize the burden such loans would have on their lives until later That’s why they’re petitioning the government to wipe away all student debt. Yes, there are student loan forgiveness programs, but it’s not enough.
The problem of student debt is that it’s going to continue to rise. All the issues that caused this mess in the first place don’t look to be hammered out anytime soon. The only tool the government has to combat this is to throw more money at students. The problem is, the government doesn’t seem to want to help. It depends on who is in charge of the administration.
Where former President Obama’s heart was in the right place, it’s not economically sustainable for the federal government to help much longer. Student debt programs were already in President Trump’s scope to be cut from the budget.