The cost of higher education in this country is more than alarming. As someone who graduated with more than $70,000.00 in student loans for my out-of-state tuition, I sometimes want to slap myself silly for borrowing so much money.
When I was in college in the 90s, I borrowed tens of thousands of dollars each year despite having no credit history. Getting my loan money each semester was easier than opening a credit card with Macy’s. I couldn't buy a pair of shoes on credit but I was able to borrow an almost unlimited amount of money with no idea or plan in place as to how I would pay it back four years later.
Fifteen years later, I now understand that something is fundamentally wrong with a system that allows a student to accumulate so much debt by the age of 22. Most student loan borrowers have never had a chance to earn an income or manage debt and a budget, yet the total number of student loans outstanding in the U.S. is $750 billion dollars. With our economy failing in so many different other areas, almost 70% of lenders anticipate that student borrows will be delinquent in their payments. While some of these students may “bank” on filing bankruptcy, they will be disappointed to find out that neither federal or private student loans are discharge-able in bankruptcy unless a student demonstrates extraordinary circumstances.
The solution is not to just to lower loan rates, instead we need to make higher education in this country affordable. Until college and graduate programs are more affordable, we must be able to provide American students with other ways to pay for college. Enacting laws that change the way students borrow money and how that money will be paid back must be part of the solution. We also need to provide our students with more resources to avoid borrowing money.
Currently there is hope for mothers like myself worried about how she will pay for college for three children. President Obama has doubled his investment in scholarships and financial aid so that students from working- and middle-class families can have access to higher education without the fear of owing so much upon graduation. This new law give me peace of mind. I have invested so much time and resources to give my children the best education possible during their kindergarten through high school years. My goal is to have my children qualify for academic scholarships so that after college, they are focused on finding or starting their new jobs rather than worrying about how they will pay back an impossible debt. If my children do not qualify or receive scholarships, President Obama has also enacted law that makes it easier for students to pay back their federal college loans. These changes demonstrate a commitment by our current administration to ensure that higher education is still a feasible option for American students and families like mine.
This post is part of a weekly conversation with our Moms Matter 2012 political bloggers. To see the original question and what the other writers have to say, read What Do You Think About the Student Loan Interest Rate?
Image via BarackObama.com