As per recent reports, the student loan debt level is surging above $1trillion and has outdone the debt amount on auto loans and the credit cards. The average student loan debt recently surpassed $25,000, up by 30% since the last decade. The mushrooming student loan debt level has direct inferences for all the tax payers as 9 in 10 of these loans are either guaranteed or issued by the government. Though the President, Barack Obama has offered proposals to fine-tune the entire system and facilitate repayments, yet the quandary of the indebted students couldn't create much attention in the presidential campaign.
The entire story of another debt crisis few are talking about
Didn't the government student loan program seem to be a good idea way back in 1965? Borrow money to grab your college degree and repay it later after you get a job! Though this seems to be fantastic, yet there are many borrowers who are about to flunk on the loan payments, as they're tripped by their real-life painful financial lessons. The cost of college education is soaring faster than the cost of medical care and three times faster than consumer prices. According to 2010 reports, a University of Missouri grad graduated with $25,000 in debt, slightly below the national average. With a sluggish job market, the students are finding it difficult to pay off their loans as they aren't getting jobs that can help them build wealth. As an increasingly large number of students return to school, this is further increasing their indebtedness.
President Barack Obama offered a wide array of proposals to ease off the repayment procedure of the students but the dilemma of the overburdened students hasn't yet been a focus in the GOP presidential campaign. Most of the presidential candidates are indifferent about the student loan curriculum and the proposals of Obama in particular. The escalating cost of joining and attending schools is lifting the student loan debt even further. As the enrollment costs rise throughout the years, the borrowing level is even increasing out of control.
Is it only the young adults who are weighed down with the burden of debt?
No, it isn't only the young adults who are saddled with the burden of student loan debt as the federal government and the parents bear a generous part of the postsecondary education bill, as per reports by the FRB of New York. Few student loan borrowers are even baby boomers who are nearing their retirement age. Reports of the Fed even studied that the Americans who are 60 or even older, still owe a balance of $40 billion on their student loan, which is certainly a shocking fact. What complicates the scene further is that the student loans can't be discharged in bankruptcy filings.
Is Obama a "snob" for urging all Americans to attain post high-school education?
It was Rick Santorum who went so far as to call Obama a "snob" as he urged all Americans to attain some form of high-school education, even though polls show that over 90% of the parents expect their children to go to college. Newt Gingrich claims student loans to be a "Ponzi scheme" through which students are spending the money that they borrow now but are becoming liable to pay off the national debt in the form of taxes in the long run.
How is the student loan debt crisis different from the previous catastrophes?
According to the CFPB and the Fed, there's a difference between the present student loan debt crisis and the previous financial disasters. The difference lies in the fact that the debacle hasn't been ignored by the government. In fact, the Obama administration has tackled and is still trying to gear the student loan debt crisis from the get-go and has even achieved some significant triumphs, even though he is being ferociously opposed by the Republicans at every step.
If you're to judge the overall success of the efforts put in by Obama, it might become quite tricky at this point of time. Obama's efforts to make a dent in the total outstanding debt level may take many years but most students are at least satisfied with the fact that it is much easier now to pay the student loan bills. The present Obama administration has worked to fix the broken system in the context of a political process that makes achieving changes almost impossible. To know more on ways to tackle student loan debt, you may visit
http://www.debtconsolidationcare.com/
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