Thirty years ago, moving away from home and settling down was common procedure for recent college graduates. Today, however, that life plan is becoming more of an “Once upon a time..” as today’s college graduates are finding it somewhat difficult to accomplish even the simplest of young adult activities, such as moving out.
With 7 out of 10 students finishing school with student loans, what was once supposed to be a promising bright future seems to be more of a dim light at the end of a long tunnel. Many graduates are looking at over a decade worth of payments before they can even scratch the surface of financial freedom. Paying more for each monthly contribution seems like the simple fix, but what about the college graduates whose career passion is a low paying profession? What if you cannot find a job in your field of study?
Even for someone who gets a job immediately out of college, having a low paying profession, one cannot simply just make greater contributions. Young students might understand the cost of their student loans when they are signing up for them, but many of them don’t have the slightest hint on how long they will be paying them and how it will influence their life upon graduating. Imagine trying to make a life for yourself when your finances are almost completely tied up with student loans.
College kids can sign up for student loans without even being qualified for a credit card. For many, using a credit card, usually capped at $2,000 for new holders, and making small monthly payments is an elementary way to understand how debt payments work - to get out of debt and not rack up interest you have to pay as much of the principal as financially possible. Nonetheless, many millenials make the mistake of blindly chaining themselves to over $30,000 in student loans on average.
Granted that a college degree is practically required and expected in society today, many young students think their degree will allow them to make way more than it costs them in student loans. Although there is some truth to this logic in some cases, it is not foolproof. Very reputable professions like teachers, social workers, and counselors offer great and necessary service to society but they do not bring home great and necessary salaries. Not being able to keep up with the accumulating interest and recurring payments can easily send one’s mental and physical health into a downward spiral.
The student loan crisis is spreading very quickly as many people are becoming deprived of some of life’s more basic pleasures like buying a house, starting a family, or simply moving out of your parents’ basement. As the student loan crisis seems to be only getting worse, it will not be surprising to see it leak into other sectors of the economy like the housing market and continue to wreak havoc on millions of Americans.
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