Americans are drowning in student loan debt, collectively owing $1.5 trillion.
Worry over school costs can hurt students. Photograph (c) Damir / stock.Adobe.comRising college costs mean that number isn’t likely to drop much in the next few decades.
The average student borrower takes out around $26,000 in loans over the course of a bachelor’s degree - debt that’s impossible to discharge in bankruptcy, difficult to have forgiven and increasingly unlikely to be fully repaid on schedule.
Here’s a look at the costs of that debt and what’s being done to lessen the crisis:
The direct cost - New research shows that student debt load is making Americans less likely to buy homes or start families, and more likely to live at home and take jobs just to make ends meet, instead of the more lucrative positions for which their degrees prepared them.
Short-term solutions include deferring loans by returning to school, or consolidating or borrowing from private lenders, which ends up making the problem worse. For students graduating into a tight job market whose credit ratings are impacted by the amounts they owe, loan debt can remain their chief financial concern for decades.
The hidden cost - Hidden costs often prevent lower-income students from pursuing the highest-value degrees.
The recent trend of “differential pricing,” in which tuition costs are dictated by a student’s field of study, has had an effect on enrollment in high-employment fields, potentially scaring off the students who could benefit the most from an in-demand degree.
Easing the crisis - Organizations such as Scholarship America are working to alleviate the crisis. As the nation’s largest provider of private-sector scholarships, it delivers their most direct impact by giving students funding for higher education - $264 million last year, and more than $4 billion over its history.
