I know there are a lot of people nowadays in such quagmire or perhaps will soon find themselves in such enmeshment upon graduation. Recent statistics have shown that student loan debt is expected to unprecedentedly exceed $1 trillion this year. So basically this means that Americans now owe more money on student loans than they do on credit card debt. That is absolutely insane and sad at the same time. What makes this worse is that student loans cannot be classified as an ordinary debt because the debt cannot be shed by declaring bankruptcy. For all my business majors, was anyone told this when they were going to school because I certainly was not.
Given the unstable economy, high unemployment rates, and increasing higher education costs, the College Board reveals that students are borrowing twice the amount of money for college than they borrowed ten years ago after adjusting for inflation. Unfortunately, the burden of these outstanding loans falls on the young individuals struggling to kick-off their careers.
Mark Kantrowitz, the publisher of FinAid.org, told USA Today, “Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children.” (They clearly did not include Ghanaians in those statistics because I seem to be attending a wedding every week or every other weekend so I do not know how valid those findings are.)
Here is the irony in the whole situation though. Delay in acquiring these major assets could damage the economy.
“The less money that goes into the economy, the worse off it will be,” said Jen Murphy, a finance major at Emory University. “The economy constantly needs to be boosted and fed. If the next generation does not have the funds to buy cars, etc., these industries will begin to fail.” It is all a paradox. I mean here are major companies such as Apple bombarding the next generation with Ipads, Iphone 4s, snapbacks, etc., encouraging them to spend their money on those tangible items whose worth will depreciate as time goes on. I mean what is the point in getting an Ipad 2 now when an IPad 3 will be out soon? So if the next generation is not contributing into long term assets, mass media is responsible for that as well. Who is really teaching the next generation to save that money as opposed to spending it on the new Iphone? I mean, is Siri really going to tell you to put aside a minimum of 10% of your earnings each time you get a paycheck?
Beyond the economy, the extraordinarily high level of outstanding student loans sparks the debate over the true value of a college education. It is important to note that for-profit schools — online colleges that offer career-specific courses — have the highest student loan default rates, even though only 10 percent of higher education students are enrolled in them.
Studies show that 25 percent of for-profit college students default on their loans within three years of leaving the school, and most of these students do not even complete their degrees. Statistics like these have students and professionals alike asking themselves: Does it make sense to go to college and sign up for all of this future debt? But it is really not the students’ fault. They are just following the “protocol” of life that has been laid down by their parents since they were little that, ‘having a bachelor’s degree will guarantee success in life.’
Brown University junior, Brian Sokolow, once said, students are dealing with two conflicting notions.“There seems to be two counteracting pressures,” he said. “The increased student debt might lead high school students to consider foregoing college altogether, but at the same time, I think a higher rate of unemployment is having the opposite effect. It seems that the job market is getting more and more competitive and as a result, a college education seems to be more important for getting a job.”
Murphy believes the student loan debt will have a significant impact whether or not an individual chooses to go to college.“I would guess that many students will begin to select public institutions over private institutions in order to reduce the cost of tuition,” he said. Private institutions may begin to suffer. How about the individuals that actually attend the institutions and graduate with no job? Don’t they suffer as well?
