Education: The Gift that Keeps on Giving

Part of my Saturday, and by part I mean the majority, involves watching CNN. The show I particularly enjoy watching is Your Money, where they touch on a variety of issues revolving around personal finance. This past week on a segment discussing student loan debt, I realized how fortunate I’ll be to graduate from college without any debt. Sadly, this is not the case with the majority (about two-thirds) of students attending public colleges and universities in our country. I don’t know if it was diligent planning on my parents’ part, dumb luck, or a combination of the two, but I do know that at the particular school I attend, over 80 percent of the students receive some type of financial aid. That being said, I feel extremely blessed to be a part of the minority, especially considering the slim chances of a decrease in tuition and the phenomenal amount of greed we as Americans possess. Student loans loom over the heads of graduates, chasing them well into their career, and playing a dominate role in determining the career path a student takes following graduation (assuming they are able to find a job at all). If you haven’t heard already, total student loan debt in the U.S. surpassed credit card debt this year and just recently reached the $1 trillion mark. The average student loan debt is upwards of $25,000 ($25,250 per student to be exact). President Obama has taken a couple small steps in relieving students of their debt. First, by reducing the number of years students are required to pay back their debt, from 25 to 20 years, granted all of your payments are accounted for and on time. Secondly, the payments can only be up to 10 percent of your earned income, which down from 15 percent, and is adjusted each year as your income changes. The eligibility requirements of this program are outlined in detail here.

While watching CNN, they mentioned a college that gave class credit for a real world course in managing your money, not just impractical information from some textbook. There’s so much value in courses like this, “because the school knows that if their students leave the school with $25,000 in debt they won’t be able to contribute and give back to the school.” And not only that, it’s information students can use for the rest of their lives, which ultimately amounts in them making better financial decisions, improving the overall economy in the process. Financial awareness and effective money management should start long before college, but that’s beside the point.

In this age, where two-thirds of students, the lifeblood of these educational systems, need to borrow money to finance their education and budget cuts cause schools to increase tuition annually, debt has become the barometer of a quality education.

Until this student loan debt situation gets properly sorted out, preferably by some mandate, you need to make sure you are going about college the right way, financially. One way, is finding scholarships that cater to you and your particular demographic. They even give scholarships for being weird, unusual, and bizarre. Also, put aside your reservations about community college, because it happens to be one of the most sensible alternatives to shelling out $20,000 a year at a 4-year university straight out of high school. Unfortunately, due to human psychology, the prestige of let’s say, a degree from Stanford, is somehow diminished by the prior attendance of a 2-year college. This is partly attributed to our focus on how others perceive us and our inflated internal need for that perception to be positive.

Money Help For Christians outlines some great ways to graduate without any debt. Paying through a payment plan has proved to be the most practical option to pay for school. It costs about as much a new car, on a per-month basis, and by doing this, I’m ensuring that salary will not completely control my future career decisions.

A few facts about student loan debt:

  • The unemployment rate for college graduates is only about 4-5 percent.
  • Since 1978, the cost of college tuition in the United States has gone up by over 900 percent, which is due to a combination of inflation, a better and more innovative educational structure, and greed.
  • 14 percent of students that graduate with student loan debt end up defaulting within 3 years of making their first student loan payment, meaning that they are either unwilling or in most cases, unable to pay the specified amount.
  • 53 percent of college graduates from 2006 to 2010 have full-time jobs, while 21 percent are in graduate school, 12 percent are working part time, and 9 percent are unemployed.
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