Thursday 18 July 2013

Assessing the Student Debt Crisis

The issue of college debt in the United States is no joke, but the amount of money that young people have to repay for obtaining a college diploma these days might be. It seems as if you hear people talk about their student debt almost as often as they talk about football or complain about political issues in this country. Coming from my own personal experience, student debt can certainly remove the wind from a person’s sails. It causes some serious anxiety, especially after knowing the balance to repay that debt is greater than your entire yearly salary. Here are a few facts and observations in relation to the current state of student debt in America.


Assessing the Student Debt Crisis

In 2011, the average student loan debt calculated in at $26,600. With a 5% increase since 2010, this is the highest average student debt in history. This number is compounded by a weak job market and difficulty of newly-graduated college students finding quality jobs, which exclude jobs at your hometown diner. As a student who graduated recently, I cannot tell you how many people I’ve met that continue to live with their parents at 25, 26, and 27 years old because they have outstanding student debts. The fact that these individuals are losing critical years on their lives because they cannot afford to live independently is absolutely sobering, not to mention the longer they take to pay off their student debt the higher their interest rates will climb.


The state that leads the nation in average student debt is New Hampshire, with each student carrying an average debt of $32,440. Utah ranked at the bottom of average student debt, averaging $17,227. This is largely due to only 45% of students taking out loans for funding their education in Utah, along with the high number of private colleges in Utah, including Brigham Young University. Although private college tuition costs may, on average, remain higher than the tuition costs at a public university, a student will generally receive more funding and scholarship opportunities at private than public colleges. This isn’t to say you’ll have less debt graduating from a private college or university, but it may be something for someone to consider before deciding on which school to attend.


There is an obvious value to a college education. In 2011 the unemployment rate for college graduates was 8.8%, while the unemployment rate for individuals carrying only a high school diploma was 19.1%. Not only is college a means to better your chances at employment, a higher education invariably develops an individual’s personal character and intangible skillset. But does the overall value of a college education outweigh the serious economic problems students face following their graduation? I certainly believe so, but it seems to me many are forgoing part of, or the entirety of their college education, based on the potentiality of debt in the post-college world. We live in a society in which a college education is largely an expectation for all of us, but considering the possibility of a decade in debt and financial struggles to repay for a college education, is college really worth it?

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