Student Debt Has Become A Crisis
I’ve written about crippling student debt several times before in this blog. Mostly I’ve tried to draw attention to the skyrocketing cost of a college education and how it can cripple former students financially for the rest of their lives.
This article tackles the same subject from a different perspective – about how unpaid student debt is a creeping threat to the U.S. economy. The article states, “Student debt has more than tripled since 2004, reaching $1.52 trillion in the first quarter of 2018, according to the Federal Reserve — second only to mortgage debt in the U.S. College costs have outpaced the Consumer Price Index more than four-fold since 1985, and tuition assistance today is often harder to come by, particularly at schools without large endowments.”
Some other key excerpts:
- About 44 million college graduates owe money from student loans, their debts averaging about $37,000, which is about a down payment on a home. Unless you own megabucks, it will be hard to ever save enough to be a home buyer when you first have to pay back all that money. Big debt also limits your ability to get married, have children and enjoy life to the fullest.
- College costs have escalated so much that it’s all but impossible to finance a college education by working part-time and in summer jobs, like many people of my generation managed to do.
- College loans are especially troubling to people who drop out before finishing a degree. They owe a lot of money yet have diminished job prospects. Only 60% of college students end up graduating within six years.
- Student loans can bug you your entire life. A 2014 U.S. General Accountability Office study found a growing percentage of Americans age 65 and older are carrying student debt. Households headed by 65- to 74-year-olds with student debt grew from about 1% in 2004 to 4% in 2010. This is a time of life when you should be retired from work and enjoying travel, family and other pleasures. Increasing numbers of senior citizens instead are forced to continue working to pay off loans they took out many decades before. Oh, and with federal loans, the U.S. government can garnish social security checks.
I’ve pointed this out any times before but it’s worth stating over and over: a trade education costs a small fraction of what it takes to pay for a college degree, and often comes free with employers subsidizing your training. It’s a great deal.