Education Costs Are Leading to Installment Loans
the first to be hit by easy credit available to students as a way to meet the soaring costs of education. Americans relied on the financial products of the Wall Street boom to pay for higher education, but all of these shrank without a trace in the tsunami that engulfed the stock markets, not to mention the losses from the college savings plans, or 529 plans as they are called. Is it any wonder that students are now left wondering where their next payment for further education is going to come from? In the meantime, lenders have raised rates and dramatically curtailed the availability of installment loans, adding further fuel to the raging fire. As things stand at the moment, students can only hope for assistance from federally backed programs for student loans, while parents will have to seek solace in the form of installment loans.
A Bleak Future
One only has to look at the current circumstances to conclude that students will indeed face a bleak future. Most federally backed programs offer students $5,500 a year in loans, but costs have increased and this amount is no longer sufficient to obtain a four year degree. A new law will come into effect on February 22, 2010, which will ban students under 21 from being approved for credit cards, which will no doubt create further troubles for students in getting easy credit. Not having a job will make their life more difficult as they will not be eligible for installment loans. Perhaps the worst aspect of these circumstances will lead to students dropping out of college in order to earn a living. Even if they choose to continue their studies and hold onto their jobs, it will only result in lower grades. The white collar jobs they dream about will only remain as a dream that will never be achieved if they cannot focus fully on their studies.
Will The Government Step In?
It is now time that the federal government step in and come out with student specific plans, especially since parents are utilizing all possible resources that they can. If the students are the future of this country, helping them find better financial aid is a step in the right direction. The costs of education will remain high, and the only solution for the government is to offer long term installment loans to deserving students. This will not only bring about a change in the economy in the long term, but will also help retain jobs in the country.