Students loans have become more of a problem when it comes to debt than credit card debt. While people are paying down their credit card balances within the aftermath of the financial crisis, college costs continue to rise. . Many think that colleges are raising the costs of tuition making it almost not worth it to get student loans. Top growing fields right now don’t require a bachelor’s degree anyway.
Student loan debt rises with college costs
Americans have, as outlined by June 2010 figures shown by the Federal Reserve, $ 826.5 billion in revolving credit right now. Americans have $ 829,785 billion in student loans as outlined by a Wall Street Journal article showing a report from FinAid.org. Student debt has gone up $ 300 billion in just the last four years, reports the Journal in an interview with Mark Kantrowitz who’s the publisher of FinAid.org and FastWeb.com. With college costs increasing rapidly and also the duration of unemployment increasing, numerous parents borrow to make up the main difference.
Student loans don’t have consumer protection
Student loan debt is often times worse than credit card debt. Student loans typically can’t be written off in bankruptcy. Missing payments with student loan repayment can mean some terrible penalties. According to Student Loan Justice, federal student loan borrowers have none of the consumer protections that come with credit card debt, including statutes of limitations, truth in lending laws, state usury laws and fair debt collection statutes. They say lending student loans is “an inherently predatory lending system that succeeds when the students fail.”
College costs enough to drain family finances
Student loan debt is rising along with college costs. As outlined by Bank Investment Consultant, the average costs for private universities and in state students at college were $ 35,636 and $ 15,213 in 2009-2010. A rise of 5 percent has happened each and every year. Many top institutions have announced that total charges will top $ 50,000 within the current academic year. To cover such costs, families may have to use current income and spend savings as well as borrow money.
Bachelor’s degrees becoming pointless
Rising student loan debt leads some to wonder whether going in hock for years to get a degree is worth it. By 2012, only half of those who began a bachelor’s degree program in 2006 may have graduated, reports the New York Times. Only seven of the 30 jobs that are intended to grow fastest in the next ten years even need a bachelor’s degree, reports the Bureau of Labor Statistics. Among the top 10 growing job categories, two require college degrees. According to the founder of the Center for College Affordability and Productivity, Richard K. Vedder, who talked to the Times in an interview, a 1999 federal study shows that 15 percent of mail carriers have bachelor’s degrees. He was quoted saying:
“Some of them could have purchased a house for what they spent on their education.”
Additional reading
Wall Street Journal
blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/
Bank Investment Consultant
bankinvestmentconsultant.com/bic_issues/2010_8/college-cost-gone-wild-2668047-1.html?zkPrintable=1 and amp;nopagination=1
New York Times
nytimes.com/2010/05/16/weekinreview/16steinberg.html
