I watched this earlier this morning and I’ve got to say, long-term I think that it’s one of the bigger problems that we face as a nation when we’re talking about prosperity and economic recovery because needless to say, running up big college bills + not finding a job upon graduation = BAD!!!
It’s important that we address all of the facets of the problem because if we focus in on just one like student loan interest, the system is still going to fail anyways. It’s easier to just talk about “fixing” loan rates without actually addressing the ancillary issues like the stickiness compared to other kinds of debt or the fact that they’re given out to just about anyone with a co-signer. The recent legislation that Congress is patting itself on the back for is a great example of this – sure, they dropped interest rates … sort of … but what’s to stop tuition rates from continuing to skyrocket, or people from getting in over their heads when they realize firsthand just how much the current job market sucks – not just for new grads, but for everybody!
Much like healthcare, I’m really not sure how we get to where we need to be without drastic changes that probably would never fly in our society, but it’s an important quandary to think about when you consider that the average college student now leaves school with $26,600 in debts, and yet when we talk about the alternative of whether or not kids really need to go to college, the answer from the job market is that they need to go to college more than ever in order to be competitive!
We need a better way for kids to get higher education without committing themselves to such outrageous financial ties before they even have any idea what their first paycheck might be … you’d never buy a house or a car by saying, “I don’t make any money now, but in four years, I’ll definitely be bringing in $45,000 a year!” And yet that’s what we do with student loans today, and even the ones who are lucky enough to score that sweet right out of college will find that it’s quite the buzz kill when they finally do the math and realize that unless they accelerate that payment plan that they’re just now getting used to, they can expect to be making them for more than a decade after they’ve graduated if they just stick to the minimums that show up on their statements each month.
Ouch. 😳