The rising cost of education in the U.S. is causing serious problems for students and financial institutions.
According to the National Center for Education Statistics, the average cost for undergraduate tuition and room and board for the 2007-08 academic year at public institutions was $11,578. For four-year institutions, the figure rose to $13,424. Since the numbers are now three years old, the cost is undoubtedly even higher than that.
Some students are fortunate enough to get scholarships, grants and tuition assistance from other programs. Other students get help from parents or relatives, but the majority of students have to resort to student loans.
Without the assistance of student loans from financial giants such as Sallie Mae, Citi and Wachovia, the majority of college students in this country would not be college students at all.
Education is extremely important and its benefits are significant. In 2008, people with a bachelors degree or higher had an average annual salary of $45,000, compared to the $25,000 annual salary of those with a high school diploma or GED. College students also benefit from work experience, improved social skills and an increased knowledge in a wide range of areas.
However, the growing number of student loan debt is becoming a major issue. According to an Aug. 17 article in the Atlanta Post, Americans have accrued in excess of $600 billion in federal student loans and more than $167 billion in outstanding private student loans.
As the mound of student debt continues to pile up, the number of people who default on student loans is rising. As unemployment in Michigan has skyrocketed, more and more people are unable to pay back student loans. Without a job, loans are not getting paid back.
As loans do not get repaid, lenders could soon face a crisis. Let’s hope the housing-bubble burst in 2008 is not a foreshadowing for another financial catastrophe. Fannie Mae and Freddie Mac went bankrupt and were taken over by the federal government because of the housing crisis and we could be heading for a similar situation for student loan lenders if something does not change.
For many students, the cost of post-secondary education outweighs the benefits. It is great that more young people want to be educated and have more opportunities than 30 years ago. However, with the current system in place, students are almost being hindered because of their desire to learn.
My education has been an invaluable experience. I could not have learned what I’ve learned in the classroom and in various jobs without being a college student. I would not trade my experience for anything.
That being said, my student loan debt is something I will be paying off for years after graduation. It will be difficult to save a substantial amount of money with a $500 monthly payment flying out the window. The effects of student loans cause many students to go further in debt.
There has to be a way to provide education more affordably for students. If we don’t stand up to the tuition and housing increases, eventually the costs will be so high that it will not make financial sense to get a college education. If that ever happens, the future of this country is in jeopardy.