It's never been more important to earn a college degree to succeed in today's increasingly competitive employment marketplace. It's also never been more expensive, and student debt has never been higher. More students are filling out college applications than ever before, and the amount of student debt is causing concern in Washington.
Time magazine reports that student debt in the U.S. has topped $100 billion for the first time in history. That figure is expected to rise to $1 trillion by the end of this year, outpacing even credit card debt. Students are borrowing more than double the amount they were 10 years ago, even after adjusting for inflation. In the last five years alone, the total amount of student debt owed has doubled.
Add to that an uncertain job market, and the picture looks pretty bleak. According to federal data, the amount of 16- to 24-year olds in the workplace in July was 59 percent, compared to 77 percent in the summer of 1989.
"It has become all too common for state legislatures to dip into the pockets of students and families to balance state budgets," Molly Corbet-Broad, president of the American Council on Education, told USA Today.
President Barack Obama, in an attempt to ease the considerable burden faced by students and college graduates, announced measures intended to alleviate some of the pressures of student loan repayments.
Under the president's planned legislation, borrowers will have to repay 10 percent of their discretionary income as opposed to 15 percent, and any remaining debt which has been unpaid will be forgiven after a period of 20 years, as opposed to 25 years. The new laws will come into effect next year, two years earlier than the proposed 2014 introduction date.
"I know you're hearing stories from friends and classmates and siblings who are struggling to find work, and you're wondering what's in store for your future. And I know that can be scary," President Obama said during a speech given at Colorado University's Denver campus earlier this week, as quoted by CBS News. "We want you in school. But we shouldn't saddle you with debt when you're starting off."
The Obama administration stated that more than 1.6 million Americans will benefit from the new regulations, and that an additional six million will be able to take advantage of student loan consolidations. Interest rates on student loan payments will be reduced by .5 percent under the new laws if students combine their loans into single payments under the new initiative.
Tags: college applications