The higher education system in the United States is considered to be one of the best in the world. While this is no doubt true, attention must also be paid to the unbelievable financial cost that students are burdened with after they successfully enrol. As it currently stands, the US is dealing with education-related debts that impact more than 44 million US students (roughly 1 in 4 of the general US population), with the total owed coming in at around $1.4 trillion. These statistics, these truths mean that the burden of education’s financial output is America’s second-largest debt (after consumer mortgages). Since 2005, monthly student loan payments have risen from $227 USD on average to $393 USD in 2016. Today, US graduates owe $20,000 more than they did only thirteen years ago. This astonishingly rapid increase in financial debts for students will, if it continues to burn through at this pace, end up resulting in students owing more for their education than they have to pay for the houses they will live in. It sounds insane. And it is.
44 million US graduates are collectively struggling to pay off $1.4 trillion in academic debt, and the US government has done little to help that has actually gone through past initial planning stages. The average US student graduates with a [not so] cool $37,172 in student loans. This is a shocking debt when you consider the fact that the United States is also one of the most expensive countries to live in, in all the world. Couple this crushing student expense with the fact that students can literally be handed warrants for arrest and/or costly fines if they fail to pay their student loans off. This is the unfortunate reality, and while thankfully there are legal practices that help students and/or graduates deal with student loan debt collection harassment and other academically inclined legal issues, this is often little (if any) comfort to the students having to spend even more money to protect themselves. In this modern era, this kind of financial debt not only racks up incredibly quickly, but has in fact proven itself to be the beginnings of a certain economic crisis.
Despite what seemed like straight forward plans for a new student loan system in the US, just seven short months before the scheduled release of said new tech system, the Education Department is completely disregarding its own plan, instead starting again from the beginning to forge an entirely new plan. All the current servicers’ that send out monthly bills, collect payments, and guide graduates through the repayment process (a process that can and often does take decades) contracts expire soon this year. The Education Department was poised to use that opportunity to overhaul the current system, replacing the fragmented system with a new, more relevant and streamlined version. It has been a long time coming. In fact, the Education Department first began planning its overhaul of the servicing system more than four years ago, when the Obama administration was still in power. Bureaucratic challenges and political oversight have slowed the process down at every step.
Even now, with the initial plan set for release in little over half a year being axed in favour of a fresh take, the Education Department continues to insist that it is taking crucial and valuable steps to ensure the smoothest transition possible for federal student loan borrowers. Now, the primary concern is rooted in just how long it will take to successfully action a plan and set it in motion for positive impact. The education system’s financial debt is so astronomically high, to incredibly overwhelming, that US students and graduates around the country are being forced even still to live in relative comfort as they struggle to pay off their academic debts. The student debt situation has well and truly reached new peaks, with 44 million US graduates – and climbing – struggling to repay the $1.4 trillion student debt collective in the nation. With no end in sight, it is a matter of students finding ways to cope with the financial stress and keep themselves out of legal trouble in the process.
The United States has an education system that, around the globe, is largely considered to be one of the best in the world. This is an ongoing assumption that has proven time and again to be true, but the US education system is also one of the costliest in the world – both for the students as individuals and for the nation. Today, 44 million US graduates collectively owe $1.4 trillion (and climbing) for their academic endeavours, a financial figure that, quite frankly, is terrifying to comprehend. With each graduate walking away with, on average, $37,172 in student loans, it is not surprising in the least to understand how this growing educational debt has quickly gained the reputation of being a prospective economic crisis.