Student debt (still) a really big problem

Life after college is something we all think about on a daily basis. We all worry about how our various degrees will aid us as soon as senior year is over and the job search begins.

With the end of our college careers comes the newfound stress of repaying debt incurred through student loans. Currently, student debt is at an all-time high. The Federal Reserve Bank of New York estimates around 37 million Americans have student loan debt totaling $870 billion, although other authorities have stated that it’s in the trillions by now.

On average, each student owes around $23,000, with only 39 percent paying down balances. Around 5.4 million borrowers are defaulting on at least one of their loans.

Some 85 percent of that debt is owed to the federal government, with the remaining 15 percent coming from private loans. More often than not, it is high interest rates from the private lenders that cause students to seek debt counseling or bankruptcy.

So student debt is a pretty big problem right now for college students. As if it weren’t bad enough, there is currently some fishy legislation going on that would increase the interest rate on federally subsidized Stafford student loans. The current interest rate is 3.4 percent, but if this legislation is successfully passed, it would double to a ridiculously high 6.8 percent.

With that kind of increase, undergrads could end up paying at least $3,000 more over the average 10-year payment plan.

While it can seem like all hope has been lost, fear not. Sen. Charles Schumer, D-N.Y., is pushing counter legislation that will block the rise in interest rates nationwide. Along with Schumer’s attempt at extending cheaper interest rates is the Student Loan Forgiveness Act.

The SLFA was created by U.S. Rep. Hansen Clarke, D-Mich. The act, H.R. 4170, would forgive student loan debt for those who have paid 10 percent of their income toward their loans for 10 years as well as cap interest on federal student loans at the current 3.4 percent. Students going into teaching, public service or medicinal practices in underserved areas would have their debt forgiven after only five years.

Earlier this month, Hansen held a discussion forum in a Detroit classroom on easing student debt.

“Everyone tells us to go to school and work hard and we’ll be rewarded for our dedication,” Clarke said. “But the promise of a dream can turn into a nightmare for so many people.”

He’s right; most of us are expected to move on to college after high school graduation, followed by finding a job pertaining to what we majored in. That’s all fine and dandy, but when the job market is as competitive as it is right now, college and a career seem like pipe dreams.

The fact that student loan debt has now risen higher than the amount that Americans owe on their credit cards is sobering. Debt sucks, but, unfortunately, it is something a majority of us will have to face during our college experience.

If the government is going to stress the importance of a college education, then college needs to be cheaper. Sure—lower the interest rates, please do. But the real problem is that college expenses have reached ridiculous heights.

If college were cheaper, students would not have to take out so many loans in the first place. Just last month, PSU students were told that their tuition for the 2012–13 school year would be raised 7 percent. While that is slightly better than the 10 percent originally proposed, any cost increase is a bad increase.

Just the other day, President Barack Obama appeared on Late Night with Jimmy Fallon to “slow jam” the news. He and Fallon reiterated how important this student debt crisis is and urged viewers to think about the situation and be active for the cause.

Excessive debt is putting a huge burden on current and former students. Student debt is impeding economic growth in the U.S., which makes it harder for businesses to grow (or start in the first place) and for individuals to invest or buy homes.

The best bet we have right now is to support the SLFA and hope that it gets passed through Congress before the first of July.

This once again shows how important choosing who the leader of our country is. Do you want to put someone in power who has not expressed interest in lowering the cost of college tuition and forgiving student debt? I sure don’t.

While there really isn’t much we can do about it individually, apart from staying informed and active, we do have the power to vote and voice our opinions. We need to exercise these rights and do what’s best for us as well as future generations. If student debt keeps rising, no one will be able to go to college except for the top tier of society, and that is not fair.

What Schumer, Clarke and our president are working toward is something that will benefit everyone—not just college students—in the long run. We are, after all, the future of this country, and it would be really nice to not be showered with hundreds of thousands of dollars worth of unnecessary debt after graduation.