Student loan debt is rapidly spinning out of control. Students are borrowing tens of thousands of dollars for an education. Their plans are to graduate from college, get a good paying job in the career of their chosen field, and slowly start to pay back those loans over the next several years. And while of course this is an admirable goal to have, the truth is there is the risk of taking on student loan debt, not being able to find a job — or finding a low-paying one not in the chosen field — and not being able to pay back what was once borrowed.
When looking at the issue, students are borrowing more and more in order to pay for the rising cost of college. In fact, students who graduated last spring on average had $26,600 in student loans. However, it should be noted this average does not include the loans those students had who graduated from for-profit schools, which tend to cost even more.
In terms of where graduates are ending up once they have their degree, according to Northeastern University’s Center for Labor Market studies, more than 50 percent of those who graduated last spring, who were under the age of 25, were either unemployed or working in a position that did not fully utilize the knowledge and skill sets they acquired in college.
And while there are some discrepancies on the actual percentages, as Georgetown University’s Center on Education and Workforce put the underemployment rate a lot lower, one thing everyone can agree on is that college is expensive and students are fearful of taking on debt.
However, even though it seems counterintuitive to take on debt during a time when there is a shaky economy and high unemployment rates, sources point out that having a college degree still increases the chances for success. In fact, the unemployment rate for those without a college degree is estimated at 19.1 percent.
Looking to the future, with political candidates having their own ideas on how to solve the student loan debt problem, it will be interested to see what changes are made to the system and if these changes result in noticeable differences for the graduates who are worrying month to month about how to pay back their student loans.
Source: The Associated Press, “Average student loan debt rises to $26,600 for class of 2011, study shows,” Oct. 18, 2012