The Financial Protection Bureau recently reported that total student debt topped $1 trillion last year (2011). They report that some of the reasons for the rise is a lot of Americans returning to college, instead of staying in the weak labor market. Tuition increases have continued especially considering cuts in state funding. Also many parents have been unable to help as much with college due to job loss or career stagnation, and hits to their investment portfolio.
Data from the New York Fed indicate that almost one in four student borrowers are behind on payments. All of this debt doesn’t bode well for the housing market, as more graduates and young families struggle, they are unable to save for down payments and afford a mortgage. Another example of how debt can feel like bondage. It is no wonder the Bible warns against debt and equates it to slavery.
Maybe some college debt can be avoided as some students pursue all the options such as grants and aid, scholarships, work-study or part-time jobs, shopping around for the best college deals as well as completing some of the first couple of year’s of basic courses at a community college and then transferring.
Source: Wall Street Journal