As a Christian father of three children, I am always looking for ways to take care of my children and make sure that they have a good chance at their future life. I want them to grow up knowing that they can do whatever they want.
With that said, I also want my children to understand that not everything in life is free. After all, everything in life requires a bit of work here and there. I’ve always been a proponent of hard work, but working smarter has also been an important lesson in my mind.
Student loans are a good example given what I’ve just discussed. You can go to college and do whatever you want, but you have to pay for it, usually with student loans. You are required to work hard during and after college to acquire a good job to pay off debt. There is the working hard part along with some financial responsibility, but now we should move towards the working smarter aspect.
Student loans are readily available to students, but many of them lack the proper knowledge to accurately assess their options with student debt as well as the implications of taking on student debt. If not approached the right way, student borrowers (and my kids eventually!) may fall into debt pitfalls, struggling to claw their way out during the prime of their lives.
I am a prime example of a student loan debt statistic and I fell into that pit. I want to share some facts about student loan debt that will shock you to your core and make your stomach turn in an instant. Believe me, I was shocked too.
The Student Loan Situation
- Borrowers who are leaving school are leaving with an estimated $30,000 in student loan debt. In addition, roughly 5 percent of borrowers have more than $100,000 in student loan debt. While the 5 percent number may seem low, these borrowers account for up to a third of the student loan debt that is outstanding.
- Student loan debt is hurting the credit rating of young people, and they are finding it much harder to finance vehicles and homes. In addition, these same people find it harder to rent places to live as well due to their financial situation caused by student loan debt.
- There is a rising rate of loan delinquency in the US. In fact, as of 2016, there was a delinquency rate of 11.2 percent. What this tells us is that borrowers are unable to keep up with their payments for one reason or another.
- Student loan debt continues to climb and there is more than $1.4 trillion in debt according to TICAS. This number is more than doubled over its value in the past decade or so. It is believed that due to many of the economic pressures arising in recent years, more students and parents are taking out student loans to pay for their education. This is also spurred on by the rising cost of tuition across the nation.
- When looking at student loan debt repayment and delinquency, one in ten borrowers is more than 90 days behind on a payment which puts them near default status.
The above statistics are shocking at best, and they really open our eyes to the true state of not only the economy, but the cost of college as well. I hope the above information will help you make the right decision about your college education and open your eyes to the true cost of college.
As you can see, there is a serious problem with student loan debt. It needs to be handled one way or another, but it never seems to be handled properly. I know that I do not want my children to become another student loan debt statistic.