The saying goes that the only things that are guaranteed in life are death and taxes. However, more and more there's been another addition to that list. The new guarantee seems to be that if you go to college, you are going to be burdened with tremendous amounts of debt for years to come. The question is, what are the implications of this?
College debt for students seems to constantly be increasing. Private institutions around the country are charging upwards of $40,000 and some are even pressing up on the $50,000 level. While there are a number of scholarships available today to reduce the burdens students are suffering, it is still not uncommon for students to leave school with upwards of $50,000 in debt. If you add medical school or law school to the mix, and you're likely to break into the six figures of debt.
What do these college loans mean for the economy as a whole? As these debts grow larger and larger, students are looking at bigger monthly payments. As a result, the amount of disposable income available to these graduates is lower, preventing them from having the purchasing power needed to galvanize the economy and from buying homes as early as they might have without those large debts. As students push off settling down and buying homes, the market for new homes loses a valuable market.
Finally, a dangerous implication of these large loans being placed on students graduating from college, is the creation of a society in which people don't recognize the significance of their debts. When a 23 year old graduates from college with debts of sixty to one hundred thousand dollars, they become desensitized to the reality of their debt and feel no issue spending more on future purchases. A thirty thousand dollar car to someone already facing one hundred thousand dollars of debt seems like a trivial added cost. As such, the question becomes how much does the debt affect a person's mindset, and how much debt is too much.
Overall, as the country looks at ways to improve after facing the challenges of a large recession, one area that is worth investigating is the tremendous college debt facing students today. While the government has begun to tackle the issue by investigating for profit colleges, it is likely only the start in confronting the United States education system.
College debt for students seems to constantly be increasing. Private institutions around the country are charging upwards of $40,000 and some are even pressing up on the $50,000 level. While there are a number of scholarships available today to reduce the burdens students are suffering, it is still not uncommon for students to leave school with upwards of $50,000 in debt. If you add medical school or law school to the mix, and you're likely to break into the six figures of debt.
What do these college loans mean for the economy as a whole? As these debts grow larger and larger, students are looking at bigger monthly payments. As a result, the amount of disposable income available to these graduates is lower, preventing them from having the purchasing power needed to galvanize the economy and from buying homes as early as they might have without those large debts. As students push off settling down and buying homes, the market for new homes loses a valuable market.
Finally, a dangerous implication of these large loans being placed on students graduating from college, is the creation of a society in which people don't recognize the significance of their debts. When a 23 year old graduates from college with debts of sixty to one hundred thousand dollars, they become desensitized to the reality of their debt and feel no issue spending more on future purchases. A thirty thousand dollar car to someone already facing one hundred thousand dollars of debt seems like a trivial added cost. As such, the question becomes how much does the debt affect a person's mindset, and how much debt is too much.
Overall, as the country looks at ways to improve after facing the challenges of a large recession, one area that is worth investigating is the tremendous college debt facing students today. While the government has begun to tackle the issue by investigating for profit colleges, it is likely only the start in confronting the United States education system.
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