A record number of degree-holders are well past due on a $100 billion student loan bill.
Unfortunately, this can’t be helped as nearly a third of recent graduates between 20 and 24 are currently unemployed and living back at home with their parents or otherwise struggling to make ends-meet, according to the Department of Education.
Many teenagers emerging from high school don’t realize the financial ramifications of taking on loans. We all can’t go to college for free – not everyone’s parents can afford to foot the bill, part time jobs can only cover so much, some academic scholarships only cover tuition costs (not living expenses), and some students have extraordinary circumstances inhibiting their ability to pay upfront for their education. Grants and scholarships are available but limited to those who meet applicable requirements.
Teenagers are not the only ones who’ve taken on loans. A noteworthy wave of unemployed adults returned to college in recent years, seeking job-related training in hopes of transitioning to other areas of occupation.
Student loans are one of the largest categories of consumer debt, rivaled by mortgages and then credit cards. Eleven percent of education-related loans are significantly delinquent – exceeding 90 days overdue, impacting the credit reports of would-be payees. Failing to pay collaterally affects their ability to acquire work or a better paying job, as some employers screen credit reports in order to vet potential workers. This means purchasing a home or car can also be influenced.
There is always opting for approved postponements but overtime interest continues to accrue, and eventually the bill will come due. Unlike credit cards and unsecured financing, these types of loans are typically excluded from bankruptcy processes and are extremely difficult to expunge if unpaid.
The cost of education has increased by leaps and bounds in the last decade, as well as interest rates on the outstanding $1 trillion in student loans taken out to pay for it. However, the employment market has not kept in pace as the quality of jobs available to graduates are those many worked without a hard-earned degree – paying just shy of a livable minimum wage.
Who wants to pay an average of $40,000 for a Bachelor’s Degree in Business just to turn around and wait tables like they did in high school?
Today’s economy leaves many to quest the value of obtaining a college degree entirely in lieu of vocation-specific training – dental hygiene, welding, or auto-repair for example – as a diploma no longer holds the same middle-class employment path it used to.
Still, employment rates among college graduates in the US are around 87 percent in comparison to the 64 percent of those who only completed high school.
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