You think midterms are hard? Try paying off your student loans. Image from Wikimedia Commons.
Recently, it was announced that debt from higher education has outpaced debt from credit cards. Current students and recent graduates are obviously not surprised, but for many it comes as a shock. The cost of attending a four-year university has increased dramatically over the last 20 years, and many have had to turn to getting federal loans, bank loans or education loans from other loan lenders. The amount that students are having to borrow is also increasing, and so is the number of loan defaults. Student debt is fast becoming another obstacle in the pursuit of the American Dream.
Debt increasing for students
It is incredibly likely that college students will have to borrow money to go to a university. According to FinAid.org, 66.5 percent of all students that obtained a bachelors’ degree from 2007 to 2008 had to get loans to pay for school and ended up $22,656 in debt. Public university students, of which 61.1 percent had to borrow, graduated with $19,839 in debt on average. Private schools take a heavier financial toll. Of private university students, 70.6 percent of students at private nonprofit schools and 97 percent at private for-profit schools have to take out loans. Private nonprofit graduates averaged $27,349 and private for-profit students averaged $24, 635 in debt for their educations.
Harder to discharge
Student loan debt is the hardest to discharge. Unlike credit cards or a mortgage, student loans cannot be discharged in bankruptcy. Also, a frustrated borrower cannot get debt settlement relief with student loans. The payments have to be made exactly as demanded; there is no loan modification for student loans. Not only that, but the number of people that default is going up. According to the Chronicle of Higher Education, 20 percent of all loans that had to be repaid since 1995 have been defaulted on. The rate is higher for students of two-year and private for-profit institutions, and the likelihood increases every year post-graduation.
Students pay dearly for their education
The consequences are that students have to put things off longer. Graduate school, or even buying homes and having children are things which must be put off in order to pay down student loan debt.
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