Student loans are becoming a huge factor in regards to the local economy, according to leading experts. As of 2013, 37 million Americans now owe roughly $1.08 trillion in student loans with the average household owing $26,000 apiece.
According to the Federal Reserve Bank of New York, student debt now totals more than either credit card or auto loan debt, while both the number of borrowers and amount borrowed ballooned by 70 percent from 2004 to 2012 in the U.S.
As a result, estimates show that the average four-year graduate accumulates $26,000 to $29,000 in loans, and needs roughly a decade to pay off every penny of their bachelor’s degree alone. With unemployment rates still well above pre-recession levels, and many recent college graduates earning roughly $10 an hour after acquiring their educational standards, some graduates are wondering if their degree was worth the price.
The increases have been driven in part by rising tuition, resulting from reduced state funding and costlier campus facilities and amenities. As a result, middle to lower-class students are finding it difficult to break away from their class barrier, especially considering the rise of tuition per year.
California in particular has been named one of the top five states to have recently raised their tuition again this year. It was suggested that tuition could rise another 20.3 percent for the second semester of the upcoming academic year for UC campuses alone.
Grants are also solely awarded to those who earn merit rather than showcase a “need” for monetary funds, which widens the gap between the upper and lower-class students.
“I kind of want to kick 18-year-old me in the butt and ask, ‘What the heck were you thinking getting a sociology degree?’ But it’s over and done with,” said UC Irvine graduate Tate Newman. “I’m still trying to find a job in my major, and I’ve been out of school for three years. Now that I’m paying my loans, I’m not even sure if I want to go back for a masters.”
After graduating with their degrees, many youths have agreed that they are ultimately feeling “stuck,” as though they were forced by society to make a life-long decision at such an early age (sometimes as early as 16 or 17). Many said that going to college was expected of them by their families.
“Most people have no idea what they are getting into, especially college students just out of high school,” said an anonymous PHS senior. “Sometimes it’s worth holding off on college for a few years just to avoid this situation. I still don’t know who I am or what I want to be. I’m not paying thousands to waste my time.”
Student loan debts are not only overwhelming the new generation, but are hindering home sales, retirement funds and overall economic growth. Due to the increase of tuition, students are forced to return home and have subsequently been named the “boomerang generation,” much to their dismay.
Worse yet, over 50 percent of new college graduates are unemployed and 36 percent find jobs that do not require a college degree. College graduates working for minimum wage has risen 71 percent from 5 years ago.
Although it is wise for working class students to attend some form of college or advanced training beyond high school, they should reconsider their options in choosing their degrees and provide plenty of research for their newfound priorities. Attending a junior college is also a solid option, in my opinion.
Contact Brooke Borba at 892-6187, ext. 24, or firstname.lastname@example.org.