![debt quadrupled[1]](https://rosalienebacchus.files.wordpress.com/2013/06/student-loan-debt-2003-2013.jpg)
Student Loan Debt 2003-2013
Source: http://www.motherjones.com
On 1 July 2013, unless they make a deal, the US Congress will pass legislation to double interest rates from 3.4 percent to 6.8 percent on federal subsidized Stafford student loans. (See HR 1330 – The Student Loan Fairness Act of 2013.) For sixty percent of students who depend on these loans to fund their college education, this increase matters. More so for working class families with net worth of under $8,500. These families account for over half of all student loan debt.
I find it difficult to understand our government’s reasoning for wanting to place more burden on the working class. We already face a student loan debt crisis in the United States. Our outstanding student debt has already soared beyond one trillion dollars. That’s more than the nation’s combined auto and credit card debt.
Due to runaway college tuition, an increase of over fifty percent since 1999, students and their families have taken on crippling debt loads. My son is among the 37.1 million borrowers with outstanding student loans. Almost seven million of them are delinquent on their payments, totaling $113 billion.
I know the value of a college education. Our children who would like to pursue higher education should have a chance to do so. It’s not only an investment in their individual development and professional growth, but also beneficial to our communities, industries, and nation.
But our world was transformed by the global financial crisis of 2008. The job market shrunk. Competition for job openings is fierce. Our investment in a college education no longer guarantees a better and higher paying career path. In a time of austerity, maintaining loan payments becomes a struggle when we are faced with unemployment and under-employment.
Consider student loan debt statistics for the first Quarter of 2012. The average student loan balance was $24,301. Twenty five percent of borrowers owed more than $28,000. One percent, or 167,000 people, were crushed with balances exceeding $200,000. While 67 percent of borrowers were up to 39 years of age, 33 percent, or 12.5 million people, were forty years and older.
Borrowers who have Sallie Mae private student loans face even greater challenges with higher interest rates than Stafford loans. America’s largest private student loan lender owns about fifteen percent, or $162.5 billion, of our total student loan debt. This corporation does not care about students trapped in crippling debt. Only their profit counts.
Beginning our adult life with student loan debt sabotages our future. When the debt becomes burdensome, it hampers our potential to grow. Opportunities are lost. We put our lives on hold. The vision of our future is blurred or dismal. (Join young people working for affordable education.)
Under current market conditions, is a college education still worth it? If unchecked, can our student loan debt crisis crash our economy?
Three Worlds One Vision 
Reblogged this on Guyanese Online and commented:
Another excellent blog entry by Guyana-born Rosaliene Bacchus.
LikeLike
Cyril, thanks for reading and sharing my blog entry with your followers on Guyanese Online.
LikeLike
Reblogged this on Autumn Leaves and commented:
The popular Bachelor’s degree in liberal arts is absolutely worthless in today’s economy; so unless a student is going to pursue a degree in the sciences they are better off avoiding taking on any student debt by not going to college. When enough students refuse to attend college and enough parents refuse to send their children to institutions of higher learning – so called – those in charge will have no other choice but to lower their prices in order to recreate demand. And yes the student loan crisis is just one of many factors that will help crash the economy that will financially wipe out two thirds of American families.
LikeLike
David, thanks so much for sharing my blog post with your blog followers.
I agree with you: Several college degrees are worthless in today’s economy. As you so rightly pointed out, a fall in demand would force reduction in college tuition. But that could take time.
Given plans to double interest rates on Stafford student loans, our government appears unaware of or unconcerned about our existing student loan debt crisis.
(As requested, I have deleted your previous entry.)
LikeLike
Student loans are repayable in UK only if the student can afford to do so by
his income from working…they are “means tested” …. if they cannot find work
or do not have the income from employment the repayment is “deferred”
until their situation changes/improve….most students who find the better
paying jobs can afford to repay their loans comfortably….they are fortunately
the majority !!! Few drop out of studies altogether and accept the lower
paying jobs…some even accept “welfare” and “moonlight”….
accept “cash” payments for their labour all be it illegal to do so!
My personal opinion is that persons who have the ability should
be offered “free” education up to their “first” degrees….BA BSC ETC
after that their employers should pick up the tab for their further education.
As it is the employers who will benefit from their abilities ….research etc etc
If the student is left with a debt after their education they will exit their
host country and go elsewhere to work
Its is unfair that a taxpayer of the host country should pay for their “default”
by their exit….
A student must serve their host country for the same period they spent
in further education….especially if it was “free”or by “soft” loans.
low interest loans guaranteed by their government/taxpayers.
National service in army navy or air force was mandatory many moons
ago…but today it is too expensive to accommodate so most are now voluntary
People who are prepared to put their lives at risk for a job….professionals
who are prepared to kill or be killed …. Some brave some stupid !
Hey both future kings of UK HARRY AND WILLIAM are evidence of “loyalty”
and “royalty”! two young men who must serve their country before they become king.
Kamptan
LikeLike
Thanks for sharing, Kamptan. It would be great if a first-degree college education were free. However, all that we’re asking for are lower interest rates, standard repayment terms, and interest-free deferments to unemployed borrowers.
LikeLike
No matter how “stacked” things are we must “fight on”
As the saying goes “truth to power” ….am sure the youths
of tomorrow will win their “battle” but the “war” will take
a little longer.
Forever the optimist
Kamptan
LikeLike
As you point out, Rosaliene, the situation is destructive of our youth and of the country’s future. As the president of a small college scholarship fund that serves our alma mater (now an inner city school), I and the members of our selection committee see the roadblocks put in front of the best our young people. Too many, we fear, won’t surmount them, even with our help.
LikeLike
Your small college scholarship fund contributes to the good of your community. You can only do what is within your reach.
Our young people need to be more engaged in issues that affect their lives. Only then can they bring about change.
LikeLike
As I think back to myself at their age at the same high school, I can’t easily imagine myself or the present supporters of the scholarship we run doing what you’ve suggested. Doubtless, young people across the world have become more engaged than we were. Some small number of those we benefit have taken steps toward political action. But, I expect that things may have to get worse before there is enough motivation for most of them to do so. Too many already suffer from a failure of imagination: an inability to see themselves doing anything very worthwhile.
LikeLike
This is sad news for America.
LikeLike
The increased cost of student loans, due to the proposed increase in interest rate, will have a big impact on poor and middle class students. Since education is becoming increasingly expensive students should carefully select courses and degrees that will enable them to get jobs after graduation. Of course, education and training in the sciences, technical and healthcare fields make much more sense than getting degrees in liberal arts.
Thanks Rosaliene for this very informative article.
LikeLike
Thanks Deen.
What do we say to a son who wants to study music, or a daughter who dreams of being a dancer? What kind of world will we have without the arts?
Perhaps what we need is a new way of looking at education and training.
LikeLike
Exactly
we cannot all be “rocket” scientists…I went through Saints Stanislaus
College in a B form….was never enticed by head to top class to move to an A
form ….research has shown that most B formers out perform A formers
in their later years….in careers that did not require academia to achieve their
maximum potential….a lot of A formers followed a teaching career….or professional ones doctors lawyers etc etc….some of the most successful
people were college/uni drop outs….
Unless you intend to specialise a degree is not essential for success in following a career….some of the best world leaders are non academic.
The world is changing and those who can adapt to the changes will
enjoy more success.
Am forever the optimist
Kamptan
LikeLike
Today we have “open university” on BBCTV and a first degree can be achieved
by TV studies..also most questions can be answered by GOOGLEing…
who may be spying on us but a lot is media “hype”….unless I am planning
a criminal activity spying serves no useful purpose….
Hey CIA KGB MI5 ET AL all exchange info …that’s their JOB ! spies !
They also saves lives by sharing info….
I would be more concerned with the industrial side of espionage…
Technology is giving our next generation the opportunities of a lifetime
which they can choose to take or pass ! More freedom of choice or options
are the way forward….debt is an issue but a necessary evil we all have to live with
/manage or we all become addicts !
I much prefer addiction to love than drug/religion/money.
My choice
Kamptan
LikeLike
I was lucky enough to attend college in California when both CA and NY still had the to public state college and university systems in the US. This was the 60s and 70s – even into the 80s. And it was cheap. Granted, I lived at home and worked part time but I took out no loans – didn’t even borrow from my parents. And I got my BA in 4 years. By that time, I had married and was then able to see a husband through school. What happened since those years? Lots of things: rising academic and administrative salaries, yes, but more significant was a shift of state and federal moneys out of education. The US has never been a nation in love with the intellect, let alone the intellectual and it shows, more and more. The same is true of America’s distrust of the artist, but that’s another issue. I would ask again and again: 1) Where the hell is all the school bond money we vote for election after election? And 2) What happened to all the Lottery money, at least in CA, that was supposed to go to schools? You mean to tell me there isn’t even enough cash to fix the toilets in Los Angeles’ city schools? We should be ashamed.
LikeLike
Thanks for sharing, Angela. Given our current student debt crisis, it’s hard to believe there was a time of low-cost college education in the US. Where indeed is all that money going? No transparency.
The America of your generation is now an unattainable dream.
LikeLike
Trailer now available of the documentary film, eduCAUTION: A Documentary on the Student Loan Debt Crisis, at the following link:
LikeLike