Students loans have become more of a problem when it comes to debt than credit card debt. It is beginning to cost more to go to college, but credit card balances are being paid off. Some analysts say less consumer protection for student loans than other types of borrowing is a reason for the trend. Numerous think that colleges are raising the costs of tuition making it almost not worth it to get student loans. A bachelor’s degree is not even needed for the fields growing the fastest right now.
Students get more loans with college costs rising
The 2010 Federal Reserve figures show that $ 826.5 billion in revolving credit is had by Americans right now. The Wall Street Journal reports that student loans outstanding today total about $ 829,785 billion, as compiled by FinAid.org. The Journal talked to the publisher of FinAid.org and FastWeb.com, Mark Kantrowitz, who said that in just the last four years there has been $ 200 billion taken out in student debt. Parents are just borrowing because college costs more but unemployment has gone up.
Student loans lack consumer protections
Student loan debt could be more dangerous than credit card debt. Student loans typically can’t be written off in bankruptcy. And some student loan repayment terms inflict harsh penalties for borrowers who miss payments. Student Loan Justice reports that consumer protections like statutes of limitations, truth in lending laws, state usury laws and fair debt collection statutes don’t come with student loans as they do with credit cards. They say lending student loans is “an inherently predatory lending system that succeeds when the students fail.”
Student loan debt is increasing along with college costs. 2009-2010’s average tuition prices for private colleges and in state tuition state colleges were $ 35,636 and $ 15,213, reports Bank Investment Consultant. These costs have been increasing by about 5 percent a year. Many top institutions have announced that total charges will top $ 50,000 within the current academic year. Paying for school is difficult enough for families before having to pay with income and savings for schooling.
Bachelor’s degrees starting to become worthless
Getting a degree is worthless with the student loans that have to be taken out to get it right now. By 2012, only half of those who started a bachelor’s degree program in 2006 could have graduated, reports the New York Times. The Bureau of Labor Statistics reports that within the next ten years, seven of the thirty jobs expected to grow the fasted require a bachelor degree. Only 2 of the top 10 growing job categories need degrees. Richard K. Vedder, founder of the Center for College Affordability and Productivity, told the Times that 15 percent of mail carriers have bachelor’s degrees, according to a 1999 federal study. He was quoted saying:
“Some of them could have bought a house for what they spent on their education.”
Additional reading
Wall Street Journal
blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/
Bank Investment Consultant
bankinvestmentconsultant.com/bic_issues/2010_8/college-cost-gone-wild-2668047-1.html?zkPrintable=1 and amp;nopagination=1
New York Times
nytimes.com/2010/05/16/weekinreview/16steinberg.html
