Even though the President signed off on the bipartisan student loan deal last month to keep current student loan interest rates low, it doesn’t bode well for the future and there are other looming educational crises that are not being addressed. The student loan bill is a band-aid that may make borrowers bleed when it’s ripped off in years to come. The Treasury-note rate federal loans are now tied to is predicted to rise and will see borrowers paying far more in interest after Obama is gone from office.
Over Obama’s tenure in office, things have not gone well for college students and student loan debtors. This is not to lay the blame at the feet of POTUS, but it’s simply a sign of the times. It’s the cumulative effect of years of policies – some recent, some not so recent – blended with economic crises, a disappointing job market, plummeting real estate and other factors that have made a perfect storm of poor outcomes when it comes to student loans and educational costs.
Here are 10 of our top concerns:
#1 Public college tuition has risen 27% above inflation over the past five years.
#2 College enrollment is on the decline.
#3 Average amount of Pell Grant awarded per recipient has been declining since 2010.
#4 Student loan delinquency rates are on the rise in all age groups.
#5 Average student loan balances continue to rise.
#6 Rate of students dropping out of college has increased over the past decade.
#7 Of student loan debtors, 68% say the last four years have been more difficult to make ends meet.
#8 Student loans are forcing grads to postpone home purchases on average by five years.
#9 Student loans have outstripped credit cards and auto loans as the greatest household debt since 2009.
#10 Government profit from student loans will continue to increase over the next decade.
This $1.2 trillion dollar crisis (and climbing) is a complex problem and one piece of legislation certainly isn’t going to bring it all tumbling down or fix everything. Obama’s recent bus tour on college affordability is great – any spotlight being shined on too-high costs of university education is important.
But the proposed solutions being discussed will likely be crushed in Congress thanks to big bucks spent by colleges lobbying for favorable legislation. And those lobbying dollars – in a full circle of frustration – come from the rising costs of tuition paid for by ever increasing student loans. It’s enough to make your head spin…
The best solution for you as an individual student loan borrower is to address your personal economic situation – that’s much more feasible than tackling the ills of the system as a whole. Here’s how to get started:
First: please sign up for Tuition.io’s free student loan tool to track, manage and optimize your debt.
Second: if you’re not already signed up for IBR or PAYE and are struggling with your payments, look into that.
Third: check out our blogs on methods to get yourself out of debt faster without going broke.
Fourth: use the resources in our student loan help center to find handy How Tos and informative guides and information on all aspects of your debt.
Five: be sure to laugh at the your troubles now and then so it doesn’t drive you nuts!