Burgeoning student loan debt – Wait a little to achieve your dream
Student loans are regarded as good debt for myriads of reasons. These loans help to give a push to your career. You can study the subjects of your choice and choose a career that will help to fulfill your dreams. However, in the last few years, the word “student loan” has become an anathema in the nation. Student loan debt has surpassed the credit card debt level in the country. The lack of proper growth in the employment sector is the primary reason behind this. Several fresh graduates are not getting any job in the country. These students are left only with 2 options:
- Move back to their parent’s house
- Go for higher studies
In case of the first option, it is true that students don’t have to bear any extra expenses. Their parents (who are mostly on the verge of retirement) have to look after their adult children. In addition to that, these hapless parents have to make payments (whatever they can) on the student loans since they are stuck with them as co-signers or guarantors.
In the second option, students are going for higher studies since there is hardly any other lucrative opportunity for them. They’re at least able to enhance their academic qualification in this way. However, in this case also, students have to get the help of financial aids, grants, scholarships or loans. This means, they are only adding on their debt burden.
At the end of the day, the condition of both the students and parents are dreadful. Students are unable to fulfill their dreams and aspirations because of lack of money and escalating debt. Some students are accepting job offers with low pay scale since they can make some money. They can contribute to their families in whatever way they can. However, these low pay scale jobs can hardly help these cash-strapped students to achieve their goals in life, and that’s the sad part of the economy.
As per the reports of the CFPB, education debt has increased by 45% in the past 3 years. The student loan debt has reached $1.2 trillion in 2013. An average student passed out from the college with a debt load of $28,000, which is quite a big amount. The startling fact is that almost 1 in 8 graduates has a debt of more than $50,000.
It is true that the current condition of the students is scary. Obama government is giving attention to college affordability. However, only the half-hearted measures of the government will not be able to solve the debt crisis. Students need to be careful too. They need to borrow as per their affordability. Both students and parents need to be financially literate. Otherwise, more and more students will be compelled to defer their dreams and aspirations. They have to put their dreams of owning a home on hold.
Ballooning student loan debt is creating a negative impact on the overall economy. Companies that sell products and services are incurring losses due to delay in consumer spending. This will slacken the overall growth of the country.