Do you feel like your high interest rate is killing you? Have you struggled to find a decent paying job since graduation which makes it hard to pay back your student loans? Are you boardering on default and tired of getting calls from debt collectors? Well, you’re not alone. Here are some pretty frightening statistics on student loan debt:
- The percentage of borrowers who defaulted on federal education loans within the first three years of payments rose to an average of 13.4 percent last year
- The number of borrowers in default has risen to about 5.9 million, and together they owe a total of $76 billion on loans.
- The rate of students defaulting on federal loans within two years increased to 9.1 percent, the highest level in more than a decade.
- For every borrower who defaulted, at least two more were delinquent in their payments.
While we’re big fans of recent grads managing their indebtedness and finding a way to pay back student loans and still live the life they want, we also realize that there’s a HUGE problem with the student loan system. For starters, many schools encourage students to take on more debt than is reasonable in order to pay high tuition rates. Then after graduation there are very few, if any, options for people with student loans who are unable to repay their loans to discharge their debt, even through bankruptcy.
And please DON’T get us started on the insanely high interest rates that recent graduates face. 6.5%? Really!?! We realize that the interest rate has recently been reduced to 3.4% for current students, and that’s progress. But students who graduated at the height of the recession, ourselves included, still face nearly double the current student loan interest rate while earning an average starting salary of only $27,000. No wonder the default rate is so high.
Do we support the petition that calls for all student loans to be discharged? No. But we do support a serious overhaul of the student loan system, and more importantly we support a change in college tuition to once again make it at least semi-affordable for students to go to college. We also support allowing student loans to be discharged in bankruptcy and be treated like all other debt.
For those who choose college and graduate school as part of their life path, paying for college shouldn’t hinder their ability to have a comfortable life post graduation. Isn’t that the point of going to college, to better your future?
Ok, enough with the serious stuff, now it’s time for a funnier look at student loans. Enjoy the video and be sure to comment below with your thoughts on student loan debt.
Statistics source: New York Times Education Department Report Shows More Borrowers Defaulting on Student Loans