A College education is a very important tool to have
nowadays. Having a college degree can help one lands the job of his/her dream,
obtain a better salary, being able to have what one needs to have better life.
With the economy rebounding slowly, more people have been
flocking back to school to further their education. Unfortunately, with the high cost of
education, opportunity cost of being in school, it is very difficult for folks
to afford the tuition out of pocket. Therefore, students or parents get loan to
pay for their education.
According to a study from Transunion more than half of student loans are in
deferred status where the loan payment has been delayed. Deferred loans now
represent 43.5% of all student loan balances.According to the same study, the deferred loans balance has grown from $228 billion in 2007 to $388 billion in 2012, an increase of 70%. During those years, there has been an average growth of 30% per student debt the average number in dollar is $23,829.
According a government data that was analyzed by the study, the reason for the increase in the loans being deferred is due to the fact that more than 50% of graduates under the age of 25 are either unemployed or underemployed (earning way less than what they should be). The same study point out that that borrowers prefer to obtain federal student loans than obtaining private student loans. Thus a jump of 97% in the federal student loan balance from 2007 to 2012, while the private sector only saw a very small rose of 4%.
In contrast, the private student loans industry saw a drop in delinquency of 2% while the federal student loan balance rose to 27%.
Education is a very important tool to have in our society in order to obtain jobs and better wages but yet, the same tool is enslaving and burying folks in debts for a long time after graduation.
