With today’s increasing cost of living and crawling pace of average wage increase, it’s hard to set aside money to cover for the cost of education. And when there’s nowhere else to turn to, we take the other path – the student debt path.
A tough road
Taking on student debt ranks second after a mortgage as one of the most expensive financial decisions that an average American will ever make in his or her lifetime. Upon leaving college, the average borrower owes around $28,400 in student debt. And with the fast increases in interest rates, it’s not far off for that number to march even higher in the near future.
Just earlier this month, it was announced that undergraduate federal loans disbursed from July 1, 2017 to June 30, 2018 will have an increased interest rate of 4.45 percent, up from 3.76 percent the year prior.
In the private student loan department, rates have equally spurt upwards, with the average variable rate now at 7.81 percent while average fixed rate now stands at 9.66 percent.
It’s a tough situation for college degree earners, since they don’t only have to battle the rise in tuition fee increase but also the problem with rising interest rates.
A top concern among parents and students today involves the cost that is entailed by getting a degree. This is an entirely different sentiment a decade ago, when what most were worried about is not getting into their first school of choice. Good times.
Today, the student loan situation in the US has grown into a $1.4 trillion dilemma. A quarter of a century ago, the American dream was a viable option. Can you still say the same today?