Student loans for a university education, both undergraduate and graduate level, is definitely big business in the United States. As the cost of a college degree continues to rise at a rate of about 8% per year, the need for funding via loans continues to grow as well. Additionally, because of the recent economic crisis parents are not in the best position to provide financial assistance to their children. Therefore, loans are a necessity for securing a college education. Here are some interesting and helpful facts when it comes to student loans in the US:
- Approximately 2/3 of students graduating with a college degree will have student loan debt upon graduation. From 1993 to 2004 alone this figure rose by 50%. However, even with the increase in loan expenses the average college graduate will make on average $20,000 more per year than their non-degreed peers. Over the course of a professional career, this will total nearly $1 million dollars.
- College is twice as expensive for students currently enrolled than it was for the prior generation. In fact, it is estimated that between 1 million and 1.6 million young adults do not attend college due to financial constraints or concerns.
- Most students do not grasp the volume of student loan debt that they will have once they leave college. The average student will have in excess of $40,000 in student loans when they graduate with a four-year degree. Further, on top of their student loan debt most students also graduate with at least $3,000 in credit card debt.
- Bankruptcy loans do not protect student loan debt and this applies to both federal and private loans. These debts may never be discharged in a bankruptcy court and will eventually need to be paid back. As there is pending federal legislation to actually raise the interest on student loans, the quicker the loan is paid off the lower the overall payment will be.
- There are some employers that will assist you in paying off your student loan. Teaching, medical professionals and lawyers are some of the top vocations wherein employers are willing to do this. In general, you will be required to work in your chosen field in a low income, underprivileged or underserved area for a minimum of two to five years in order to qualify. Also, the Peace Corp, AmeriCorp and the US Military also have programs in place that will provide student loan forgiveness.
- Students are also very unrealistic when it comes to the way in which they will repay their college loans. A study in 2002 by U. S. PIRG found that students believed that their starting salary upon graduation would be in the range of $39,000 whereas this figure is actually closer to $28,000. College graduates are also quick to take out a car loan upon graduation as well, which will only increase their overall obligation. This means that they will have significant debt that stretches out from ten to twenty-five years, depending on the total amount borrowed.