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Student loans derail many graduates' dreams with crushing debt burden
By Catholic Online (NEWS CONSORTIUM)
July 1st, 2011
Catholic Online (www.catholic.org)
July 1st, 2011
Catholic Online (www.catholic.org)
Many college graduates with degrees in hand go on to get well-paying
jobs in the government and private sectors - only to see their hopes for
a new home or new car crushed by a mountain of student loan debt. Many
students take on as much as $100,000 -- or more in debt to finance their
education. Even worse, those struggling with repayment can't default on
student loans in bankruptcy, as these loans are federally funded.
U.S. student loan debt is so high; it has reached $900 billion, more than what Americans owe on credit cards.
"It didn't seem to add up as much as it did that first payment," one graduate says. "That was a big shock and very much a revelation on how much debt I'm in."
The student loan crisis only threatens to get worse. At least 43 states have decreased funding for public higher education since 2008, according to data from the Center on Budget and Policy Priorities.
"Students fall in love with their dream college, they want to go and it doesn't matter the price," Lynn O'Shaunessy, who writes about higher education affordability on TheCollegeSolution.com says. "They just go, 'Oh, we'll pay it off when we get out,' not realizing this is a huge financial burden they're taking on when they're 18 years old. They don't even have a clue what they're getting themselves into."
The student debt problem also affects future generations, Mark Kantrowitz, president of FinAid.org and FastWeb.com says.
"More students are taking on 20 or even 30 year repayment terms, which means they're going to be repaying their own student loans when their children enroll in college," Kantrowitz said. "They're going to be less willing and less likely to borrow for their children's education."
Analysts also point out that an indebted graduate is less likely to donate to his or her alma mater. Saving for retirement isn't even an option.
To better educate potential college students, colleges in the U.S. will need to create online "net price calculators," as specified by a federal requirement. These calculators will help prospective students and their families estimate how much certain colleges will cost them after grants and scholarships are factored in
However -- borrowing some money to attend college is a good thing, O'Shaunessy says.
"Some debt is good because it gets you in the game and it gets you a college degree, and you absolutely need that," she said.
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