Nothing is certain in life but death, taxes, and student loans.
This adaption of Benjamin Franklin’s old saying fits perfectly in modern America. The 1.5 trillion-dollar student debt crisis is continuing to grow as loan interest rates are increasing and college tuition is reaching an all-time high. As the debt increases, more and more students are finding it impossible to manage payments and are going into default of their loans. Our drive for higher education is creating an entire generation of indebted consumers who will have to spend large portions of their lives fighting financial stresses and hardships from decisions they made as teenagers.
One way to start stemming this nation-wide problem is to address it before students ever take out their first loan.
- Teens need to be made aware of the long-term commitments they are making when taking on federal, subsidized, unsubsidized, and private loans.
- Students should not trust that colleges or loan providers have their best interest in mind when it comes to them borrowing money.
- The clarification between scholarships and loans needs to be defined so unclear terminology such as “awarded” cannot be linked to loans and confuse students into making improper financial decisions.
- Realistic options for career success and cheaper education need to be offered to students who cannot afford a regular 4-year college without relying heavily on student loans.
Parents and students need to better educate themselves on alternative means of financing a college degree. They need to search for cost-effective schools, free grants and scholarships available, part-time work options, and better savings plans. Most of all, parents need to help their kids decide on a realistic path towards career success without placing years of debt upon them.
Thankfully, some universities recognize this growing crisis and are trying to fight back.
- They are keeping in-state tuition as low as possible.
- The colleges are starting programs with high schools around them to educate students on better money management practices. (Foundations in Personal Finance)
- They are pushing debt-free approaches for high school kids to go to college.
The more colleges that work towards solving the student debt crisis instead of ignoring it, the sooner a proper balance can be formed between an individual’s higher education and financial security. After all, shouldn’t our nation want smart college graduates that have the ability and, more importantly, the money to continue to drive our economy into the future?