Student Loan Debt Continues To Grow
Student loans have proven to be useful in expanding college and university enrollment, however, student loans have also proven to increase the already growing debt burden faced by American’s today. Many students have to pay the growing tuition costs, only to discover that even entry-level positions are difficult to find. This means students are going deeper in debt, with only a small percentage of graduates securing jobs that pay enough to cover their impending student loan bills. Luckily, this issue is important enough that President Barack Obama is promising to identify new ways of lowering tuition and student loan bills.
Student Debt Out Of Control
College students with good credit scores have better chances of coming out of college unscathed. However, students who do not qualify for federal loans have non-federal loan options and bad credit loan opportunities that are worth exploring. It was recently reported that student loan debt is costing the US government $1,000,000,000! In fact, student debt has doubled in the last 5 years, while the number of students in college has remained the same and even gone down in some parts of the country.
Students Paying More For Tuition
Tuition costs for college students continue to increase, with no end in sight. The average in-state tuition costs $7,600 and private school tuition costs as much as $27,000 per year on average. These high costs have caused college loans to be the 2nd largest source of household debt, which is a problem the President is trying to solve by reducing the maximum payment required on federal student loans from 15% to 10%.
Federal Loan Limits for Student Debt
In an effort to control student debt, the government limits the amount of loans a student can take, based on their household status. Students who are still the dependents of their parents are limited to $31,000 in federal loans whereas independent students can take up to $57,500 in student loans. Luckily, not too many students are gaming the system, as only 0.5% of all students have accumulated over $100,000 in college loans.
Interest Rates Higher
Students with little financial resources may rely on credit cards to make up the difference. Students need to think twice about this strategy, since the national average APR is now 14.99%. Students seeking ways to pay for college should consider personal loans, scholarships, and grants before reaching for the plastic. The government is going to be tightening the purse strings soon enough, as a $1,000,000,000 student debt is hard to carry with a country that is in so much debt to collectors as is.