As the student loan crisis continues, the question of who is to blame continues to be asked also. Rising tuition costs are a big factor for students of all ages who are forced to take out large loans, as well as aggressive marketing by for-profit colleges that may cause graduates to expect better results in both career and income than are realistic in the end. As the cumulative total rises past $1.48 trillion now—and with over 44 million borrowers in the mix—unrest over the ‘crisis’ grows.
More individuals in the US are going to college but the costs involved are unrealistic for the majority, meaning that taking out student loans has become routine for most. While grants and scholarships may be available, they are often not enough to cover tuition and all the other needs for students attending school full-time. Federal loans are known as the best option because interest rates are usually better in comparison to variable rates with private student loans, and along with many other benefits, federal loans often have better flexibility for repayment later.
Certainly, everyone should have accessible, affordable education—and federal loans often provide that due to the ease in which they are attained. Students are not required to have credit and may take out loans without having to jump through as many hoops. There are concerns though that younger borrowers may not understand the financial repercussions later of having to pay back significant monthly sums. Along with that, recent news shows that the correlations between the education they are receiving and whether they will really have the income they expect can be worrisome:
“As more and more students pay ever-increasing tuition and borrow more and more money to pay for their studies, it’s remarkable how little information we have about the wage outcomes associated with different programs,” said Mark Schneider, vice president of the American Institutes for Research.
“This kind of information is essential for students to have before they enroll and before they borrow tens of thousands of dollars to pay for a degree that is not highly rewarded in the labor market.”
Stricter underwriting for federal loans has been suggested as a method for putting the brakes on the student loan crisis too, but that would restrict access for many rising freshmen who are not even out of their teens yet and most likely have not had any way to gain much credit or the funding that would be required to enter school.
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