Credit card debt has fallen behind student loans when it comes to the number one debt. It is beginning to cost more to go to college, but credit card balances are being paid off. Some analysts say less consumer protection for student loans than other types of borrowing is a reason for the trend. Others say college costs have risen beyond the return on investment in student loan debt. Top growing fields right now don’t require a bachelor’s degree anyway.
College getting more costly while students take out more loans
The 2010 Federal Reserve figures show that $ 826.5 billion in revolving credit is had by Americans right now. FinAid.org compiled reports shown on the Wall Street Journal to show student loans totals to be at $ 829,785 billion. Mark Kantrowitz, publisher of FinAid.org and FastWeb.com, told the Journal that he estimates $ 300 billion in federal student loan debt has been incurred in just the last four years. Parents are just borrowing because college costs more but unemployment has gone up.
Consumer protection unavailable with student loans
Credit card debt is usually safer than student loan debt. Student loans still stay with a person, even through a bankruptcy. Missing payments with student loan repayment can mean some terrible penalties. Student Loan Justice reports that consumer protections such as statutes of limitations, truth in lending laws, state usury laws and fair debt collection statutes don’t come with student loans as they do with credit cards. According to the exact same group, student loans are “an inherently predatory lending system that succeeds when the students fail.”
College costs enough to drain family finances
Student loan debt is increasing along with college costs. 2009-2010’s average tuition prices for private colleges and in state tuition state colleges were $ 35,636 and $ 15,213, reports Bank Investment Consultant. Yearly there has been a 5 percent increase. There are announcements from top institutions claiming they are raising their charges this year to be over $ 50,000. To cover such costs, families may have to use current income and spend savings also as borrow money.
Less worth for Bachelor’s degrees
Rising student loan debt leads some to wonder whether going in hock for years to get a degree is worth it. As outlined by the New York Times, despite six years of trying, only half of all students starting a bachelor’s degree in 2006 will graduate by 2012. The Bureau of Labor Statistics reports that in the next ten years, seven of the thirty jobs expected to grow the fasted require a bachelor degree. Among the top 10 growing job categories, two require college degrees. 15 percent of all mail carriers have bachelor degrees as shown in a 1999 federal study discussed within the Times by Richard K. Vedder who is the founder of the Center for College Affordability. He said:
“Some of them could have bought a house for what they spent on their education.”
Further reading
Wall Street Journal
blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/
Bank Investment Consultant
bankinvestmentconsultant.com/bic_issues/2010_8/college-cost-gone-wild-2668047-1.html?zkPrintable=1 and amp;nopagination=1
New York Times
nytimes.com/2010/05/16/weekinreview/16steinberg.html
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