Student loan debt is getting out of control. More than 1 million people default on their student loans every year. That is 22 percent of borrowers. And the numbers are rising; 40 percent will default on their student loans by 2023. For borrowers under age 30, their average monthly payment is almost $400. Student loan debt now exceeds $1.5 trillion — surpassing both auto loan and credit card debt. It is an epidemic that will continue to get worse unless something is done.
Making tuition “free,” as some Democrats recommend, isn’t the solution, since that just passes the debt along to other Americans as taxes are raised to pay for it. It also doesn’t work. In Sweden, where tuition is free, 70 percent of students borrow money for things like room and board. This is the same rate as students that take out student loans in the U.S.!
It would be nice to get the government out of the business of student loans completely, but since that will probably never happen, here are some realistic solutions that may help.
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8 comments:
Here's a thought or a few. Drive a beater, work 2 jobs, pay cash, drink coffee at home, pay rent, utilities, insurance and gas. Match your employer's retirement plan contribution. Eat spaghetti, eggs fruit chicken - cooked at home. Shop sales. Pay everything else to retire debt. Don't listen to politicians. Learn about money. Be patient. QUIT BLAMING OTHERS FOR YOUR BASKET WEAVING DEGREE AND ACCEPT THAT THOSE BEFORE YOU HAD STUDENT DEBT AND THEY PAID IT OFF SNOWFLAKE.
Next problem
How about not incurring debt you have uncertainty about repaying? How about paying debts you have incurred? How about not buying things (schooling) you can't afford?
Fairly straightforward.
You took the loan, now pay it off. Period. Totally agree 9:13 and 12:16.
i call bs on this! the military industrial complex makes trillions off developing ways of killing people. But our government can't figure out how to structure a student education program. How about this maintain a "B" average in one of the STEM fields / courses which is actually useful and your college is paid for. anything else is on you! so now we have more people educated in fields which actually help this country. Plus the government gets the tax revenue for the next 30 years from higher pay, versus what they would make in some liberal feel good degree field!
I agree with all the above. I finished my college using the GI bill after spending 4 years in the Navy. Forgive their debt now and they will be forever dependent thinking someone will always bail them out. Take responsibility and earn your way.
Oh so very true 12:16 AM, how about all that?
Nothing wrong with the previous comments, but the author makes some great points. The government bastardized the student loan underwriting process, allowing for unchecked tuition cost growth, and a plethora of degrees with no real world value. She is arguing for deregulation so that the free market can help to correct these errors.
9:20 is right. Just like other government programs that encouraged spending - and abuse from the recipients of the easy money (think Medicare in 1968, the housing crisis in '06-'08).
The student loan process for PARENT PLUS loans, not as much as direct student loans, became so easy on every college bill payment website (without hardly ANY disclosures), millions of American parents got severely into debt without a blink of an eye.
Why else could college tuition inflation go up even more than healthcare inflation?
It was the ease at which consumers could spend it that got us into this problem. Don't necessarily blame the students. The finger should be pointing at the universities that developed and lobbied for the Parent Plus loan program.
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