Student loan debt — totaling more than $800 billion — outpaced credit card debt for the first time last year and is likely to top a trillion dollars this year, the New York Times reports.
“In the coming years, a lot of people will still be paying off their student loans when it’s time for their kids to go to college,” Mark Kantrowitz, publisher of FinAid.org, told the Times.
Two-thirds of bachelor’s degree recipients graduated with debt in 2008, compared with less than half in 1993, the Times writes. Last year, graduates who took out loans left college with an average of $24,000 in debt.
The mountain of debt is likely to grow more quickly with the coming round of budget-slashing, the Times writes.
In Georgia, cuts in the HOPE scholarship program will mean increased borrowing costs for many students in the future. And federal Pell grants for low-income students are expected to be cut, the Times writes.
Some education policy experts told the Times that the mounting debt has broad implications for the current generation of students.
“If you have a lot of people finishing or leaving school with a lot of debt, their choices may be very different than the generation before them,” Lauren Asher, president of the Institute for Student Access and Success, told the Times. “Things like buying a home, starting a family, starting a business, saving for their own kids’ education may not be options for people who are paying off a lot of student debt.”
What’s your situation or what will it be?
Have you changed your college or career plans for financial reasons? For example, is going to a technical college to learn a trade more appealing than it was a few years ago?
Are you trying to keep things in perspective by looking at the long-term value of a college education? Or is the tough job market for graduates in recent years changing your view?
- Henry Unger, The Biz Beat
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