Add as a preferred source on Google

Student Loan Debt

  • By Deborah P. Moore
  • 06/01/16

Being given “help” is not always helpful. That is the story being told by many who have student loan debt — a problem for all, but a bigger problem for those who dropped out before they finished. Today’s students are forced to borrow more than ever before to finance their education. The White House estimates that nearly 70 percent of bachelor’s degree recipients leave school with debt. The Consumer Financial Protection Bureau also estimates that one in four borrowers is either in delinquency or default on a student loan. Outstanding student loan debt is second only to mortgages and has now surpassed credit card debt. While the rate of default on mortgages and credit card debt has decreased, the rate of default on student loan debt is on the rise. This creates a problem not only for the student, but also for the parents who co-signed a loan and the taxpayers who are footing the bill.

Currently, total outstanding student loan debt in the U.S. is approximately $1.2 trillion. Most are loans held by the federal government. Add to that monies invested in federal grant programs. In the past 10 years, total federal grants rose 110% — from $22,017 in 2004-05 to $46,160 in 2014-15 (in 2014 dollars in  millions). In the 2014-15 award year, President Obama raised the maximum Pell Grant award to $5,730. This is a nearly $1,000 increase since 2008. And in this same time, the number of Pell Grant recipients has expanded by 50 percent. There has been an investment made in education, but the question is… has there been an adequate return?

For some, the answer is yes. According to the National Center for Education Statistics (NCES), the employment rate was 89 percent for those with a bachelor’s or higher degree. But, only about 60 percent of students who began seeking a bachelor’s degree at a four-year institution in Fall 2008 completed that degree within six years. Some took longer for their degrees, some changed institutions, but many never completed their education. Degree or not, many students don’t understand what owing tens of thousands of dollars in loans will mean after they graduate. Lack of employment or under-employment has left many carrying debt that they can’t or are unwilling to pay. The two-year cohort default rates for all borrowers entering repayment in 2011-12 was 14 percent; 24 percent for borrowers who did not graduate.

With income-driven programs being put into place to help solve the student loan dilemma, the problem has not gone away. The risk has been shifted from borrowers to taxpayers. I wish I had an answer to the growing student debt problem, but I don’t. The idea of throwing money at a problem and not addressing the issues is hurting students and our nation’s economy, not helping.

This article originally appeared in the issue of .

Featured

  • Different Starting Points, Same End Goal

    Higher education campuses can enhance student experience by implementing mobile credentials to streamline building access, on-campus payments, and access to other amenities. This enables students to connect to their campuses through the technology they use most: their mobile devices.

  • textured paper collage shows a school building on fire as a fire truck sprays water into the flames

    Why a Fire Loss Is More than Flames

    We've all seen what fire damage can do to a property, but the types of damage building owners often encounter after a fire loss can exceed expectations. Having full awareness of the different forms of damage properties can sustain helps owners respond faster, reduce continued damage, and get back on the road to recovery in short order.

  • Three U.S. Universities Install Acre Security Access Control Platform

    Cloud-native physical and digital security solutions company Acre Security recently announced that it has deployed its access control platform at three major universities in the U.S., according to a news release. Acre partnered with Atrium Campus to provide coverage for more than 69,000 students at the University of Virginia (UVA), George Mason University, and Rockhurst University.

  • UNL Kiewit Hall

    Designing for Engineering Excellence: Integrating Sustainability and Wellness at UNLs Kiewit Hall

    Kiewit Hall at the University of Nebraska-Lincoln exemplifies how academic institutions can integrate sustainability and wellness into modern learning environments. With an integrated and collaborative team approach, Kiewit Hall addresses enhanced learning and creativity, physical health, and mental wellness, and fosters a sense of community through innovative design, operations, and policy solutions.

Digital Edition