When you think about the student loan problem, do you ever think that maybe it is not as bad as everyone says it is? I mean, c’mon, can the average loan debt amount really be $30,000 per student with an overall of $1.2 trillion for all students and parents alike?
Believe it or not, the problem IS that bad and it continues to get worse, especially for those students who have student loan debt, but no degree to make paying it back any easier.
Many students, upon graduation, are leaving their colleges with excessive amounts of student loan debt, most of it crippling them and forcing them to find an alternative job just to start paying the debt down.
In fact, many college students aren’t even finding homes for themselves and are moving back in with their parents just to simply “pay the bills.” Is this really how it is supposed to be though? I mean, when you think about graduating college, you have this grandeur idea that you will fall into your chosen career and start making the big bucks, so student loans do not really affect you until you enter the real world and quickly find out your idea was just a dream.
What Are the Numbers?
To help you better understand the problem at hand, it is important to look at the true numbers of student loan debt. AND, you can’t just look at the size of the loan because some students do navigate into a position where they can afford to have the higher debt.
In 1994, students were only borrowing an average of $11,000 and in 2014, students borrowed on average $35,000. Excessive debt is classified as a repayment of at least or more than 10 percent of the student’s current income. For reference, current income-based repayment plans limit federal student loan payments to only 10 percent of discretionary income. Over the last few years, income-driven repayment plans have been expanded significantly.
Is It Exaggerated?
While student loan debt is in no way exaggerated, there are some factors that need to be looked at when we talk about these numbers. For instance, many of the people who fall into the category with excessive loan debt are minorities or people who are experiencing poverty. In fact, this in and of itself is a large problem in the student loan debt world.
In addition, when you look at student loan debt, there are options for students and a student is not stuck paying a ridiculous amount that puts him or her in danger of being homeless. In fact, if you speak with your loan provider, you will quickly learn that there are repayment options and plans that work with you based on your income and, if you make enough payments toward your loan in this program, your loan will be forgiven.
Is There a Problem?
Without a doubt there is, but what can be done to fix it? This is a difficult question to answer because there are many different ways to fix the problem, but many of them do not seem to do the trick and others just simply seem outrageous. For example, many people do not believe that Bernie Sanders can make tuition free, as he wants to do. Other countries have done it, but could the US?
Also, when it comes to student loan debt, what can be done about the unemployment rates? Or poverty? It is a difficult question to answer, but it is something that needs to be explored more because it is obvious that something is just not right when you look at the whole picture.
What Can You Do about Your Debt?
If you have student loan debt, it is important that you are making your payments as required. You do not want to let your loan default as you will face harsh consequences for doing so.
If you are having trouble paying for your loan, speak with your loan provider as they can help you get onto a plan where you can afford the payments.
Remember, with a solid budget and plan in place, you can pay down your student loan debt and be free from the chains of it as you enter into the financial prime years of your life.
Featured image courtesy of Flickr