College debt

By From page A4 | June 23, 2014

It seems like millions of college students have decided to dive off the high board with little or no experience at swimming. Metaphorically, we are talking about the $1.2 trillion in student loan debt as of March.

This year 70 percent of the undergraduates have loans. To to put that in perspective, in 2004 total student debt was $400 billion and that year 64 percent of the students had debt.

U.S. Department of Education statistics reveal that there were 190,000 borrowers enrolled at the end of March, but the total with outstanding debt at the end of the same reporting period added up to 41 million. The U.S. Census Bureau pegs the current population at about 318 million. That means nearly 13 percent of the population is loaded down with outstanding student debt. Student debt zoomed right past credit card debt and car loans.

The Obama administration took over the student loan program from private banks. Now there are no limits and the federal government shoulders the burden of collections. If a loanee just skips making payments for long enough, the federal government can garnish that person’s wages without a court order. Private lenders would need a court order to do that.

The average student debt is about $30,000.

Many graduates wind up living at home with their parents after college, even while working, because of the burden of paying off student loans. A better plan would have been to live at home for two years while attending community college. Get a job in the summer to save up for university. Nobody who attends community college and then graduates from a four-year university gets a diploma with an asterisk. They get the same diploma as somebody who spent four years collecting debt receives. Ditto for working part-time on- or off-campus while in college. The diploma doesn’t have a subtitle about working in the cafeteria or student store or Subway or Starbucks or even night watchman in an office lobby.

Another way for those whose families have fewer financial resources to come out of college debt free is to join the military and go to school on the GI Bill when you leave active duty. If a person made sure he or she was assigned to a speciality, then that person could get college credit for technical education acquired in the military, shortening up the time to graduation and even leaving some benefits left for graduate school. It beats living in your parents basement after you graduate because your student debt payments don’t leave enough to pay for an apartment.

Another way to avoid the debt is to attend a college that has a Reserve Officer Training Corps. As detailed by Wikipedia, “Under ROTC, a student may receive a competitive, merit-based scholarship, covering all or part of college tuition, in return for an obligation of active military service after graduation.” It also means time during the summer, between the junior and senior year, spent training with your chosen military service, for which one receives a certain level of pay.

All the news articles highlight the low unemployment level and higher earning power of college grads. The trick is to achieve that with little or no debt. It is not the impossible dream.

Mountain Democrat

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