With a national trillion dollar debt, students need to be mindful of finances in school and after
With the nation facing $1 trillion in student loan debt, action is needed to ensure students understand the responsibility that comes with student loan debt.
With the number of full-time students up 45 percent in the last 10 years and the economy the worst it has been since the Great Depression, college graduates are having a tough time tracking down jobs to fit their skills, especially with the high unemployment rates. According to the Project on Student Debt by the Institute for College Access and Success, 37.8 percent of graduates are working in jobs that do not require a college diploma.
Could the problem be that too many people are going to college hoping for a better paying job without considering the financial responsibility?
A higher education is something that needs to be earned. College students are typically at a point in their lives when they are learning to provide for themselves. One of the first things they need to understand is how to be responsible for the cost of their education. What better way than by having a monthly student loan payment?
The government has even taken steps to assist students by creating income-based monthly payments for people who are having financial hardships.
In addition to these new income-based payment options, Amy Hoss, associate director of financial aid at Mount Mary College, highlighted several other changes the federal government has made to aid in lending.
For example, according to Hoss, from 2007 to 2008, students’ annual subsidized loan limit increased from $2,625 to $3,500 for freshmen and $3,500 to $4,500 for sophomores. And in 2008-2009, dependent students became eligible for $2,000 in unsubsidized loan, in addition to their subsidized loan. Subsidized loans are based on financial need and do not accrue interest for the majority of time the student is in school, while unsubsidized loans accrue interest from the moment they are dispersed.
If the government is taking steps to help give students more loans (whether that be the best decision or not in this current economy), shouldn’t we act in good faith with our loan agreements?
In order to help prevent future trillions of dollars of debt, students need to be educated about all their options before entering college. We need to educate high schoolers about alternate educational paths and raise awareness of the current job market. To delude them into thinking college is the only answer to success only further hurts the economy and leaves many skilled trade jobs unfilled.
Many high schools recognize the growing skills gap and have expansive Project Lead the Way programs, which prepare students for jobs in the technology and engineering fields, whether they be two-year or four-year degrees.
Obviously, trade jobs are not for everyone. Far it be for us to discourage a passion for a liberal arts education. However, if a student still decides he or she wants to attend college, he or she needs to fully understand the specifics of taking on student loans.
Universities and colleges need to offer financial aid counseling, particularly towards the end of the college career, to help students formulate a plan to manage payments for their education.
Another great option for students is to take on student work positions. Most colleges offer vast opportunities to earn money right on campus and to learn a new set of skills.Students also need to take full advantage of the income-based repayment option. This allows students to start paying just a little each month based on their monthly incomes.
Since our country’s founding, people have worked hard to earn a higher education. We need to continue to work hard for our education and be responsible not only for our student loan debt but also for our country’s national debt.