Nearly 20 million Americans attend college every year, and of that 20 million, 12 million need to borrow funds in order to afford college. Higher education is being pushed onto students as soon as they start elementary school. Teachers have kids imagine themselves being doctors and lawyers. Nobody teaches kids that in order to achieve their dream it will require many years taking undergraduate and even graduate classes, which can add up.
Students start borrowing now and get saddled with debt reaching far into their future. In 2012 adults over the age of 50 had 4.6 million dollars in student loans that were still unpaid. Those between the ages of 40 and 49 had 5.7 million dollars in outstanding student loans. Each year more students borrow and each year debt increases.
More than 70% of college graduates in 2012 had student loans, and their average debt surpassed $29,000, according to an independent analysis of federal data made public. – Washington Post
In 2010 the average debt per student who incurred student loans was approximately $25,350, nearly $4,000 lower than the average student debt today.
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With any loan comes interest. Most of the loans that students take out do not come from banks, but from the government. While tax is the most widely known source of income for the US government, interest earned on student loans is another source of revenue.
The $41.3 billion profit (from student loan debt) for the 2013 fiscal year is down $3.6 billion from the previous year but it’s a higher profit level than all but two companies in the world: Exxon Mobil cleared $44.9 billion in 2012, and Apple cleared $41.7 billion – USA Today
While furthering your education leads to higher compensated jobs and more educated Americans, at what price does it come? Are you prepared to be in debt for potentially the next 30 years of your life?
There are alternative ways of financing your education that won’t put you in as much debt. Perhaps you could borrow money from a family member and repay them at a lower interest rate, or look for scholarships. For many who have an undergraduate degree it is important to look for employers who will pay part or all of a master’s degree, should you choose to further your education.
Know all your options before taking out a loan.