The Truth About Student Loans and Debt

According to a study conducted by the New York Times, 94% of students earning their bachelors degree have utilized student loans. That is up 49% from 1993’s 45% amount of students borrowing.

Image result for student loans

What is going on?

Within the last decade, state governments have shifted more financial responsibility to the families of students in college. Despite the fact that the enrollment in state colleges and universities has increased immensely, most states have actually cut their spending for higher education, allocating their money to things such as military, prison upkeep, and other political agendas. This trend has continued to accelerate as state budgets increasingly shrink due to financial crisis and unpopular tax increases.

National, state, and local spending per one student was adjusted for inflation and ultimately reached the lowest amount within the last 25 years. This jeopardizes the long-standing belief that state subsidized higher education is available to those of the lower and middle class. Meanwhile, cost of tuition and fees further increase, passing the rate of inflation. According to the Department of Education, should these trends continue, the average cost of a public college will double within the next fifteen years.

As of Right Now

The average student debt is $27,000.00
4 out of 10 Americans carry student debt
In 2015, 53% of graduates were unemployed
Almost 2 million people over 60 are still paying off student debt

Who Else is Responsible?

Colleges also have neglected to address their affordability issues. Institutions continue to urge students to apply despite their financial situation, but offer no solution for the long gap. Just as mortgage brokers promised a worry-free borrowing process for homeowners before the market crash, many colleges refuse to offer warnings about student debt to their doe-eyed student prospects.

The Fault of Borrowing

Without second thoughts, students are forced to borrow heinous amounts of money, throwing themselves into debt before the age 20. Beyond federal loans, it’s too difficult to borrow from private lenders because of the easy credit allowance. Students with no understanding of the concept money or loans borrow amounts that would otherwise be denied to them. This phenomena has led 43% of students to declare bankruptcy by the age of 30.

The Hope in it All

College debt is not always bad. It continues to rise and proves to leave the students at an ever increasing disadvantage, some debt is perfectly acceptable. Preparing for debt and learning as much as you can about it will only help your future. If students were to borrow from the federal stafford loan program only, they would suffer less consequences. For most this will be a $27,000 max loan.

For more information on student loans please see tomorrow’s post:

What You Need To Know About Borrowing for College



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