College debt is one of the infamous terrors that haunt current, past, and future college students.
According to CNN Money, “the average debt load for the class of 2012 was $29,400,” and “in 2011, the average debt load was $26,600.” These results were procured from a report released by the Institute for College Access & Success’ Project on Student Debt.
Colleges across the United States have been increasing the price of tuition and fees while at the same time families’ incomes have been shrinking.
Wall Street Journal stated in an article, “Most parents who sign up for college loans to pay for their children’s education opt for the federal Plus loan. The Plus loans given out during the current 2014-15 academic year charge a 7.21 percent fixed interest rate in addition to a nearly 4.3 percent origination fee.”
Some companies and banks that offer private loans are attempting to rival the federal government by offering loans with no origination fee and with set rates for anyone who applies and meets the requirements to receive the loan. Citizens Financial Group and Wells Fargo are a few examples of the many establishments offering private loans.
Some college students question whether colleges’ and universities’ main goal is to provide the best education and career options they can for their students or if they are just out to profit from College debt is no joketheir enrolled students. Graduates from Corinthian Colleges question their college education saying it was inadequate and are refusing to pay back their loans.
Ann Larson, an organizer at the The Debt Collective, stated in a Business Insider article that the graduates “spoke about being near homelessness and being unable to settle down due to their crushing student loan debt.” It doesn’t help the graduates that the U.S. job market isn’t exactly at its best at the moment.
However, TICAS president Lauren Asher told CNN Money, “Despite discouraging headlines, a college degree remains the best route to finding a job in this tight market. But students and families need to know that debt levels can vary widely from college to college.”
Some college students choose to work through the school year to help pay for their loans, but that can affect a student’s GPA. Professor of Finance Dr. Nell Gullet stated, “It’s a tough balancing act.” She deduced that what students need to do is figure out what their priorities are and to live within their means.
Adjunct Professor of Finance Ms. Shirley Borden has three points students should follow to help reduce their debt. Her points are, “do not take out a student loan for more than the actual amount needed, go to class [and study to] keep the scholarship, and do not take on additional debt after graduation.”
In the end, college students have to pick their battles and decide what their priorities are to combat their student loans. As students of UTM’s Finance 160 course learns, “it is your money and you have to decide what it is that you want your money to be doing.” In other words, be proactive and pay off your debt as quickly as possible rather than have it stack up with other debts you could procure after graduation.