Tuition Talk: where we vent our frustrations with the so-called “higher education bubble.” Raising questions such as “why do college presidents make so much money when students are struggling and in debt?” and “is college even really worth it anymore?” Check back Tuesdays and Thursdays for more!
What happens when you graduate from college (all of you who got a free ride, you can stop reading this. We still love you, but you’re super lucky and this doesn’t affect you!) in this economy and you’re not lucky enough to get a job (like many of us)? Simple. Not only do you move back in with mom and dad, you probably won’t be able to pay your student loans.
At a time when, according to Red Alert Politics, the average student leaves school in $27,000 debt – which means many students are graduating with much more than that to pay back – and jobs that pay well are hard to come by, this is an issue. Did you know that Americans owe more money on their student loans as a whole than their credit cards? Yeah, that’s not good.
So how much is that exactly? Well, Red Alert Politics says:
“With college costs climbing faster than the rate of inflation over the past four decades, education debt has swelled to $1 trillion.”
It’s no wonder that now, more than ever, students are defaulting on their student loans (and it’s only getting worse.) According to Red Alert Politics, “A new report by FICO Labs, a unit of Fair Isaac Corp., found that the student loan delinquency rate has risen…a 22 percent increase from its previous high in 2005-2007.”
So what does this mean for the future? Well, for one thing, it’s not going to be pretty. The numbers are going to keep increasing unless a solution is found. The higher the numbers, the harder it’s going to be to fix it all (and pay off all of this debt). Defaulting on student loans will only make it harder for us to eventually settle down – with mass amounts of debt, how can anyone buy a home in the future or even just live comfortably instead of going paycheck to paycheck?
We just have to hope that things get better, and in the mean time, you have to do everything you can to make your loan payments. If you’re unemployed, you can defer your federal loans or apply to lower your monthly payments, but private loans are a little more complicated. Make sure you do your research.
“According to the Consumer Financial Protection Bureau, student loans are the largest source of unsecured consumer debt in the U.S., and many financial analysts are worried about a possible loan bubble as a result of the rise in unpaid loans.”
Well that’s just fantastic. Now what?