3/16/17 – Student Loan Debt
This spring, about 13 million high school seniors will receive college acceptance letters.
Here’s what’s happening behind the headlines.
The cost of a four-year degree has gotten ridiculously expensive. A single year at some private colleges is greater than the median income of a family of four.
By the time they leave college, next year’s freshmen will have the highest-ever college loan debt. 2016 grads owed, on average, more than 37,000 dollars.
College debt has doubled in the past six years. At 1.3 trillion dollars it’s bigger than credit card and car loan balances.
There are many reasons for this. Here are three.
There are no incentives for colleges to keep costs in check. Often, money isn’t spent wisely: increased staff and faculty, fringe classes, and high-salaried administrators.
Second, the virtual government monopoly on student loans encourages taking-on reckless amounts of debt. That’s because students can get loans to study just about anything.
And, in most cases, student-loan debt cannot be discharged when someone declares bankruptcy. You have it for life. Lenders know they can literally pursue a borrower until the day they die.
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