Student loans have always been a blessing for students who need financial assistance to receive a higher education and achieve their career goals. But, the burden that remains once the student leaves campus for the real world often has been problematic, more so today than ever before.
Over the last few weeks there has been increased focus on the rising costs of student loans and the declining availability of grants for education. The attention is due in part because of a bill recently introduced into Congress — Stop the Student Loan Interest Rate Hike Act — that if passed will prevent an interest rate increase from 3.4 to 6.8 percent scheduled in July.
The latest bill was passed by the House of Representatives in late April. It appears to have bipartisan support and is backed by both President Obama and apparent GOP Presidential nominee Mitt Romney. However, there also appears to be a sizable difference between Democrats and Republicans that must be resolved.
All of this recent news started me thinking about the way the landscape has changed for our young people because of the economic tornado we’ve endured over the last few years. Think about it. The price of getting a college degree continues to go up and the opportunity to find a job — especially a good, career-oriented job — goes down.
The average college loan debt is $26,000. That’s huge. And, right now, there are about 1.5 million (53 percent) of college graduates who are either underemployed or unemployed. That, too, is huge. More and more, this economic reality is causing young people to question whether or not it’s worth it to go to college.
Student loan debt now tops credit card and car loan debt. Many experts believe that one big reason so many young people move back in with their parents after college rather than strike out on their own is because of the massive student debt they carry. Renting an apartment — and especially taking out a mortgage — is simply out of the question. That’s especially true if you are one of those thousands of young person who carries a student debt larger than $20,000 and has a job that only pays $20 an hour.
What’s all of this got to do with Realtors and builders? It’s simple. With so many young people carrying so much student debt, a generation is delaying many adult decisions like starting a family and purchasing a home. There’s no question in my mind that it is certainly eroding the next generation of an upwardly mobile middle class; the very people who are going to buy the houses we want to build and sell.
So, what’s the answer? Obviously, I’m not sure. We need our young people to go to college. It’s critical for the future of our country. And, we need student loans and grants to help make college accessible for more than just rich kids.