A ticking time bomb of American debt. Over $830 billion is owed by college students in the US with $3,000 more added on every second.
The most traditional financial baggage for Americans was credit card debt. For the first time, debt belonging to college students has overtaken that number one spot.
Economist Max Wolff said, “Students graduating in 2008, 2009 and 2010 are facing the worst job markets in a generation at least. And so you have people with more debt than we have ever seen before, who are having a harder time finding any job, let alone a job that pays them enough to somehow pay off all this debt.”
Twenty-nine-year-old Shana Falb is haunted by major money problems.
If she continues at the loan rate she entered into in her first year, by the time she is finished with school, she will have about $120,000 worth of debt, just from school loans.
What Falb earns now is barely enough to survive on a day to day basis, let alone pay back her loans.
“The money that comes from the internship is, like I said, very little. It doesn’t pay for much. It could pay for a dinner, or two,” she said.
The combination of a lack of jobs and growing debt has never been as tight for graduates.
At some US universities, students have been borrowing 70 per cent more money in the last year.
RT contributor Danny Schechter said, “Universities are actually cutting deals with the student loan companies and making money on the side. There has been a lawsuit in New York – a million dollar fine – against Columbia University for steering people to expensive loans. The danger here is that instead of capitalism we end up with serfdom, because these students are indebted for life”.
Dennis House lives in a basement in Queens, NY with two roommates, he argued, “Your loan that you are paying back shouldn’t cost you as must as it costs to live in a home. What they’re doing is completely lowering the standards of living for an entire generation of people who couldn’t help it in any way”.
Just months after graduation, he said he receives calls four times a day.
“They’re terrible. They’re the biggest loan sharks in the world right now. If you’re late on a payment, they’ll harass you,” he added.
This harassing will never go away – college debt owners cannot eliminate their debt by filing for bankruptcy.
Max Fraad Wolff explained, “Your housing debt, your car debt, your credit card debt – if you go bankrupt, it gets wiped away. You literally cannot get out of your student debt. If you decide you can’t pay it – too bad. Student loan debt is special and it’s specially sticky and hard to get rid of”.
Moreover, when your credit score falls, getting a job becomes even harder as many companies check these numbers during hiring.
Outside a major loan corporation, journalist Joe Weisenthal said youth are often pressured into taking on commitments they cannot afford without even realizing it.
“There is an incredible amount of propaganda regarding student loans and education in general. How many times have you heard the phrase ‘education is the best investment you can make’,” said Weisenthal.
But unless a dramatic turnaround in the system takes place, that statement may soon become obsolete.
Ever since the economic crisis began in the US, the debate of how it started and how to define what is rages on. But in the meantime, a generation that is supposed to be the driving force for the country is stuck – jobless and indebted.
Is college over-rated? A recent article showed that some 17 million Americans possess college degrees they do not need.
The US education system produced thousands of janitors who hold PhDs and even more who have opted to become waiters or waitresses. Should a college degree still be a priority when the economic future is far from certain?
Students need to keep in mind, even with degrees, the economy is bad, but it will get better, said Ana Kasparian, the co-host of The Young Turks.
She explained that a combination of a bad economy and underprepared students have lead to our current circumstances.
“Students are being told ‘education is power go out there, take out those loans, get that education’, but they need to do a lot of research prior to investing in their education,” said Kasparian. “If you are an 18-year-old student and you want to go to USC to get a degree in Women’s Studies that degree is not going to pay off. You are going to be at least 100 grand in debt and you’re not going to find a job that’s going to make enough money to pay off that loan.”
American students need to consider what is best for them and their future, college is an investment. They need to pick the right school and program that is cost effective, based on the field they want to pursue.
“It’s a good idea to look at college as a business move, your making an investment, is your investment going to pay off?,” said Kasparian.
She argued that students need to be more informed in high school to better prepare them for college. They need to understand loans, the education system and what it all means for their future.
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