Posted on 06/28/2013 8:20:21 AM PDT by SeekAndFind
With Congress and the Obama administration focused on Monday’s deadline to prevent student loan interest rates from doubling, it is an apt time to examine the larger consequences of America’s staggering student loan debt load. Even as mortgage, credit card and other consumer debt levels have decreased, today’s students carry unprecedented — and growing — debt burdens. With outstanding student loan debt in the first quarter of 2013 totaling a record $986 billion, the impact on individuals is disturbing. But add to that the fact that this debt load threatens the nation’s very ability to compete in the global economy, and you have the makings of a national crisis.
It is easy for those of us who are well beyond our college years to dismiss student loan debt as merely a rite of passage that we, too, endured. But today’s students are in a much more difficult financial position than any previous generation. Families are facing stagnant pay; public funding for student support has declined; and the real costs associated with higher education continue to rise. Combined with a still challenging post-graduation job market, the situation is truly a perfect storm, and one we cannot continue to ignore.
Sadly, many students are making uninformed decisions with lasting impact. While loans are an important ingredient in a student’s overall investment in higher education, it is of great concern that two out of five student loan borrowers fall behind on payments within the first five years of entering the repayment phase.
While there are no quick fixes for the student debt crisis, three sectors — education, government and business — must all step up to help solve this looming problem.
(Excerpt) Read more at politico.com ...
Hello, my daughter went to a state university. She got excellent marks despite facing a health problem and a personal situation which was so dreadful that I will not describe it here. It took raw guts and determination for her to get through. She had academic scholarships and she worked like a dog, often doing a brutally hard physical job in bitter weather. She was not spending her time drinking and partying, as her employers can assure you. I might add, she is a die-hard broken-glass conservative.
We found that it is not possible for someone who is working for $7.50 an hour to make enough to live on AND pay the tuition, fees, and books of a low-priced state college or university. My daughter did have to take out loans.
And once you start taking loans, you can’t stop. That is, you have to continue in school and get the degree, because if you drop out for any length of time the loans come due, yet without that degree you can’t get a job good enough to pay the loans back. It’s a vicious circle and it’s one many young people get into because they have no familiarity with credit, and they are sweet-talked or pressured by the university administration.
My daughter is now confronted with the need to pay her loans back. She is having a nightmarish time, working long hard hours yet still not making enough money to live decently, and now she has to come up with several hundred bucks a month in addition. She has a job—a bit of a miracle in this economy for young people—and is doing well in what may someday be a great career. But it seems she won’t be able to afford even the modest room she lives in. She has nowhere to go. It’s worrisome.
Yes, I know you have no sympathy for her and the other kids like her. You and I were able to live at home and graduate without debt because things were cheaper back then. But it’s different now. Even state schools are expensive, and sometimes, as in my state, they are extremely difficult to get into.
I don’t know what the solution is. I’m deeply glad she went to university and learned what she did, for it changed the orientation of her life for the better, toward higher things and better people. But when you see that your child is faced with homelessness despite having a job, it’s distressing indeed.
The college interest rate was once 3% - it is now 6 to 9%.
You're right. They need jobs to repay loans. And with 23% unemployment (shadowstats.com) it's a wonder these loans aren't blowing up more than they are.
Restore import tariffs too and put Americans back to work.
“We cannot continue to rely on our military in order to achieve the national security objectives that we’ve set. We’ve got to have a civilian national security force that’s just as powerful, just as strong, just as well-funded.” (emphasis added)
President Obama Colorado Springs, CO July 2, 2008
My first time around at a state university my tuition was $42.00 per credit hour, and with books it cost me about $1,000 per semester.
My latest venture I went to a great liberal arts university and got my degree in history. I got a half-tuition scholarship but I still ended up in debt at about $50,000.
Gone are the days when you can get a decent college education and graduate without any debt.
Absolutely! They also feel entitled to go out of state... meaning that at the low end tuition,books, fees, room and board will run them $30,000 plus per year, with many students paying fees closer to $40,000. Those are the costs for State Universities! The schools are raising fees every year, and because they know loans are so readily available advertise their schools and promote freshman weeks featuring pop stars.
I have a 19 year old with friends who are attending Universities up and down the east coast.
These are regular middle class kids, who’s parents earn too much for federal aid, yet cannot pay the entire cost out of pocket.
Sadly, most of them are not majoring in subjects that will lead to lucrative careers.
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