Everyone needs a college education, no one can afford it
Receiving a college education has become a part of the American dream. In order to afford the suburban house with the white picket fence, you need at least a bachelor’s degree. In spite of this societal requirement, higher education has not always provided graduates with economic freedom. In fact, it is starting to do the opposite.
The average undergraduate who takes out loans to pay for school owes approximately $30,000 in debt after graduation. This amount will take the typical graduate years to pay off, and the total continues to increase as interest builds up over time. Interest rates on federal loans can range from 4.29 percent for undergraduates to 6.84 percent for graduate students. The average starting salary for undergrads in 2015 is $50,561 a year. When expenses such as rent, utilities, groceries, and transportation are taken into account, there is not much money left over for loan payments.
In total, there is approximately $1.2 trillion in outstanding student loan debt in the United States, and this number is ever-growing. In a country which seems to be facing government shutdowns on a semi-annual basis due to a lack of funding, this level of student debt is not sustainable.
There's a new path to paying back your student loans https://t.co/vBMtBG1HYT
— Business Insider (@businessinsider) December 2, 2015
According to the Wall Street Journal, approximately 7 million Americans, or 17 percent of all student borrowers, have gone at least 360 days without making a debt payment on their student loans to the federal government. That 7 million is actually a low ball estimate, since students currently enrolled in courses are not required to start making payments on their debt until after graduation or at least six months not enrolled in classes. Deferring payments is a bad decision in the long term. Interest payments can add up very fast and leave recent graduates in more debt than they ever expected. Failure to keep up with loan payments can result in default, which can put a student’s savings and home in jeopardy.
Rising costs of both public and private colleges have made it more difficult than ever for students to afford an education. Federal loans are easy to qualify for, but can be a major hindrance in the long run. Former, current, and future students have been put in a no-win situation. They cannot afford to get a college degree, and they cannot afford not to have one.
Student debt is one of the most important problems facing the United States. It will be impossible to remain competitive on a global scale if the next generation of leaders, innovators, and spenders start their adult lives with mountains of debt. The student debt crisis will be one of the hottest political topics on the national political scene and must be addressed sooner rather than later.
Is there a way to forgive student loans while not punishing other taxpayers? Is it the responsibility of public colleges and universities to ensure that everyone can afford a college education? Feel free to leave a comment or find me on Twitter @Andrew_Morse4