No wonder so many young adults are frustrated with life and their status. For one, the job prospects are shaky for many college students and the other reason is that many of these young adults are sitting on mountains of college debt and many of them have not even completed their bachelor’s degree yet.
Two of a Kind
If there is anything to put a smile on these kid’s mouths it is that they are not the only ones who are massively in debt, the federal government is about $15 trillion in debt and that figure is growing too. The difference is, the American people do not need to be in $16 trillion in debt, but for many students, they need that college degree. Why should colleges lower tuition fees when they know they have a product that is worth a lot of money in a graduate holder’s hand and throughout their life?
The Big Picture
Regardless, there are many people worried about this situation. According to the New York Fed, out of 37 million borrowers, 5.4 million of them with a student loan balance were sitting on at least one tardy student loan account. There are many educators who are concerned with how this is affecting the economy, families, and even people’s health.
A professor at UC Berkeley’s School of Education, W. Norton Grubb, is concerned because he believes these debt levels are compelling some students to call it quits. In fact, slightly less than the number of students who begin college at a California State University end up obtaining that cherished degree. And these schools are not that expensive at all, compared to many other universities, and certainly private ones, they are cheap to attend. There are some scholars who believe America is losing some of its competitiveness in the global arena because thousands of students are not able to complete college.
Another Tax Payer Bailout
The New York Fed is even going as far as saying that tax payers should pay for some of the debt these students are facing. With governments looking to cut back because of the public debt fear, bailing out thousands of Van Wilders just does not mix well with many people. There are many people who graduated the smart way. Thousands have attended a junior college and then only had to pay for 2 years at a primary or 4 year university. This is how one can obtain a degree while saving thousands of dollars. This is not a secret.
Fixing the Economy Solves almost Everything
American students owe about $870 billion in student loans (credit card debt = $693 billion; car loan debt = $730 billion). This is the first major investment of their life and because of this degree, if they earn it, they have more options. Some people do default though on these loans and fall short of their goals. Moody’s Investors Service says about 5.1% defaulted in the 4th quarter, compared to the year before. This was for non-guaranteed loans that fall under the private category. This is double the rate that existed in the 2007 to 2009 recession. The ugly unemployment picture will only continue to exacerbate this picture as well.