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Student Loan Debt More Dangerous Than Ever

commencement. student loan debt.A recent story in U.S. News and World Report describes the dangers of student loan debt. According to the article, student loan debt has doubled since 2007, and with an estimated $1.1 trillion, it rates second after mortgages as the biggest form of household indebtedness. The article stated that one in five families have student loan debt, and that the average balance is $26,682.

That’s an average. Some have much more debt at amounts that they’ll likely never be able to fully repay.

As students graduate high school and look to their futures, they have to weigh risks. Does a four-year degree make sense to them? Is it worth the gamble of potentially going into lifelong debt? Does a two-year technical degree that could be applied to advanced manufacturing make more sense and give them a greater chance of success?

Last week, 28,000 statements concerning student loan debt were posted on the Consumer Financial Protection Bureau website. Many of them looked like this:

Between my federal student loans and alternative loans I am projected to pay 79% of my gross monthly income, starting next month…

A number of other statistics were offered in the story. Take for instance the following:

  • Five or 10 or more years after college, student-loan debt is causing young adults to avoid buying cars and homes.
  • Student loans go a long way toward explaining why, between 2007 and 2010, the number of 18-to-34-year-olds living with their parents increased by roughly 2 million.
  • They have led many young workers not to contribute to 401(k) plans, even at the sacrifice of matching money from employers.
  • They are making it hard for many graduates to pursue careers such as teaching that don’t generate enough income to repay debt.
  • They’re discouraging people from starting businesses and other forms of risk-taking.

If you take into account that many graduating from college are mostly finding jobs that don’t require a college degree at all, and pay as such, it can be disheartening. But the manufacturing sector offers an alternative. The price of a two-year technical degree is considerably less than that of a traditional college and can lead to employment in the field that students are trained in.

Students and their parents must weigh the pros and cons of their educational decisions,  but now more than ever those decisions are becoming ones that can follow them for the rest of their lives.

photo credit: j.o.h.n. walker via photopin cc

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