Can you believe that U.S. student loan debt amounts to more than the nations’ credit card debt? It can be hard to comprehend such a notion but, USA Today reported student loan debt totaling around $858 billion and credit card debt at $828 billion. Much of the increase in student loan debt is due to tuition increases. Although the cost of tuition has increased, wages earned after college have not been able to keep up, oftentimes leaving undergraduate degree recipients under water.
A report by the College Board of Policy and Advocacy released in early 2010 concluded that African American students disproportionately borrow more than other ethnic groups. Comparing achievement gaps between ethnic groups, this trend persists as students pursue higher education. For example, only 19% of African American students leave college with no debt compared to much higher rates of Hispanic (33%), White (36%), and Asian (40%) students.
Take a deeper view and find that 81% of black students leave college with some form of student loan debt. This is a 5% change from the NAACP’s 2002 study on student loan debt which concluded that 86% of all African American students leave college, graduating or not, with student loan debt. If that rate continues it could be close to 80 years before black students leave college with no debt at rates close to their peer ethnic groups.
Although a heavy burden after college, student loans have become essential to obtain a college degree. According to the College Board of Policy and Advocacy, one in five students will not be able to make payments on average loan debt. Even after all the forbearances, deferments, and modifications to soften the financial blow of student loans, many remain in tight economic situations.
Are college kids and new graduates looking for a bailout? If only they had a congressional and executive lobby to obtain the 21st Century perks of true relief like the banking industry, for example. Luckily, the President understands this issue.
The Atlanta Post Reported:
President Obama signed into law several loan reform programs, which would add more money to Pell Grants, legislate the caps of future graduates’ annual payment at 10 percent of their income and eliminate fees paid to private banks to act as intermediaries in providing loans.
This is a great start. Unfortunately it does not affect many already saddled with education debt because of the bills’ timing. Those graduating during the President’s term, however, benefit from the legislative changes for funding higher education.
In America it is a notable achievement to pursue and obtain a higher education. While financing college is a necessity, cost should not restrict a potential student from pursuing an education.