It is important to know that student loan debt is the second highest owned debt within the United States, first being mortgages. As of July of 2016, student debt reached an amount of 1.4 trillion dollars and is expected to double by 2025.
The National Center of Education Statistics mentioned that “In fall 2014, total undergraduate enrollment in degree-granting postsecondary institutions was 17.3 million students, an increase of 31 percent from 2000, when enrollment was 13.2 million students”
The NCES also mentions that enrollment is projected to increase by 14 percent between 2014 and 2025. Based on these number, it can be concluded that the actual number students attending college has in fact increased. This eventually leads up the on going battle of student debt.
The National Center of Education Statistics mentioned that “In fall 2014, total undergraduate enrollment in degree-granting postsecondary institutions was 17.3 million students, an increase of 31 percent from 2000, when enrollment was 13.2 million students”
The NCES also mentions that enrollment is projected to increase by 14 percent between 2014 and 2025. Based on these number, it can be concluded that the actual number students attending college has in fact increased. This eventually leads up the on going battle of student debt.
Causes of Student Debt
1. Rising tuition: The number of students being enrolled in an undergraduate, graduate and professional programs has been increasing tremendously. Not only that but we have to look at how much the government has cut public funding for higher education. With these two combined, it's only logical for tuition rates to go up.
2. Easy availability to loans: Another problem that it is easy to identify is the easy accessibility to getting loans. For any student that has done an application through FAFSA can see that obtaining loans is not out this world. According to the article Unburdening the Debt for Youth America, in most cases students can get loans without a need of a co-signer.
3. Inexperienced students calculating the amount to borrow: It seems as if now a days getting loans is such an easy process, due to this most incoming new students don’t know how much to borrow. These can be seen as naive and if offered a certain amount, instead of taking what they really need, students go ahead and accept the whole amount. Inexperienced students are unaware of the amounts being borrowed and by time is time to pay they end up with a huge amount.
4. There is a profit for lending companies: This is the part where lending companies take advantage of student high in debt. Loans and most may know come with interest that accumulates day by day. By the time a student is done with school they end up paying more than what they actually borrowed. In fact, the average Class of 2016 graduate has $37,172 in student loan debt, up six percent from last year (Student Loan Hero 2017).
2. Easy availability to loans: Another problem that it is easy to identify is the easy accessibility to getting loans. For any student that has done an application through FAFSA can see that obtaining loans is not out this world. According to the article Unburdening the Debt for Youth America, in most cases students can get loans without a need of a co-signer.
3. Inexperienced students calculating the amount to borrow: It seems as if now a days getting loans is such an easy process, due to this most incoming new students don’t know how much to borrow. These can be seen as naive and if offered a certain amount, instead of taking what they really need, students go ahead and accept the whole amount. Inexperienced students are unaware of the amounts being borrowed and by time is time to pay they end up with a huge amount.
4. There is a profit for lending companies: This is the part where lending companies take advantage of student high in debt. Loans and most may know come with interest that accumulates day by day. By the time a student is done with school they end up paying more than what they actually borrowed. In fact, the average Class of 2016 graduate has $37,172 in student loan debt, up six percent from last year (Student Loan Hero 2017).