Americans now owe more for their student loans than their credit card debt. While individuals are paying down their credit card balances in the aftermath of the financial crisis, college costs continue to rise. Because student loans don’t have as much consumer protection, they are picked up by more people. Many think that colleges are raising the costs of tuition making it almost not worth it to get student loans. Meanwhile, research shows that many of the top growing job fields don’t require a bachelor’s degree.
More student loans required with rising college prices
Americans owe about $ 826.5 billion in revolving credit, according to June 2010 figures from the Federal Reserve. FinAid.org compiled reports shown on the Wall Street Journal to show student loans totals to be at $ 829,785 billion. Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, told the Journal that he estimates $ 300 billion in federal student loan debt has been incurred in just the last four years. With college costs increasing rapidly and the duration of unemployment increasing, numerous parents borrow to make up the main difference.
Student loans lack consumer protections
Student loan debt is often times worse than credit card debt. Student loans still stay with a person, even through a bankruptcy. And some student loan repayment terms inflict harsh penalties for borrowers who miss payments. According to Student Loan Justice, federal student loan borrowers have none of the consumer protections that come with credit card debt, including statutes of limitations, truth in lending laws, state usury laws and fair debt collection statutes. According to the same group, student loans are “an inherently predatory lending system that succeeds when the students fail.”
Family finances take a hit with college costs
Tuition prices and student loan rates are increasing together. According to Bank Investment Consultant, the average costs for private universities and in state students at college were $ 35,636 and $ 15,213 in 2009-2010. Each year there has been a 5 percent increase. Many top institutions have announced that total charges will top $ 50,000 within the current academic year. This is too much for families trying to use all of their savings and spend income also to pay for school.
Bachelor’s degrees net poor returns
Because student loans are increasing, people are concerned that getting a degree doesn’t even have a point anymore. The New York Times reports that no more than half of students who started a four-year bachelor’s degree program within the fall of 2006 will get that degree after paying tuition for six years. The Bureau of Labor Statistics reports that within the next ten years, seven of the thirty jobs expected to grow the fasted require a bachelor degree. You will find also 10 of the top growing job categories, 2 of which need degrees. According to the founder of the Center for College Affordability and Productivity, Richard K. Vedder, who talked to the Times in an interview, a 1999 federal study shows that 15 percent of mail carriers have bachelor’s degrees. He was quoted saying:
“Some of them could have bought a house for what they spent on their education.”
Wall Street Journal
blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/
Bank Investment Consultant
bankinvestmentconsultant.com/bic_issues/2010_8/college-cost-gone-wild-2668047-1.html?zkPrintable=1 and amp;nopagination=1
New York Times
nytimes.com/2010/05/16/weekinreview/16steinberg.html
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