Student Loans: Paying Them Off Without Getting Schooled
Student loans, particularly paying them off after graduation, has become a huge individual and family problem especially when new degree holders, along with many other Americans, are having a hard time finding a job in this weak economy.
As The Inquisitr has previously reported, the average undergrad leaves school facing about $25,00o in student loan debt. You’ve heard of the real estate bubble; the U.S. also has a higher education bubble, with overall student-loan debt growing to a staggering $1 trillion. Unlike other debts, student loans are not dischargeable in bankruptcy.
The amount owing on student loans is bad enough for undergraduates. At the graduate school level, especially law school which has recently come under close scrutiny because of thousands of new attorneys can’t find work, the price tag is totally out of control.
There are steps that you and your family can take to minimize winding up in what the Orlando Sentinel calls “debtor’s prison” (and there really was such a thing through the 1800s).
High achievers and others often qualify for scholarships, although some scholarships only defray a portion of the tuition costs. That aside, recommendations to address the student loans issue include putting money away as far ahead as possible in tax-exempt educational savings accounts or Roth IRAs (or similar instruments that may exist on the state level), parents and children working together to save for college, considering less costly community colleges or state universities rather than the big-ticket private schools, and pursuing a degree that with actual job potential.
In other words, a science or engineering degree will put food on the table; an art history degree–not so much. Another cost saver is to apply only to schools in your home state where you only pay the lesser, in-state tuition. Some cities even offer to pay down your student loans if you will just move there.
Maybe this is “old school,” but people used to work (either full or part time) their way through college. And it doesn’t hurt if your employer provides tuition reimbursement as part of the benefits package. Military service also provides substantial tuition reimbursement assistance.
It wouldn’t hurt to sit down with a financial planner in advance to obtain advice about funding your education or the education of your family members.
How did get in this mess in the first place? For one thing, tuition has increased dramatically while salaries of professors and administrators in many educational institutions have gone through the roof. With student loans guaranteed by the government, i.e., the taxpayer (and Congress recently passed legislation that will keep student loan rates fixed at 3.4%), there is no incentive for colleges and universities to tighten their belts.
When it comes to being saddled with student loans, do you think a college degree is still a good investment?