Student loan debt
Student loan debt has skyrocketed so much over the years that it has become a crisis for most countries.
Rising tuition fees and living expenses of students, delinquency on the part of borrowers because of the falling job opportunities for graduates from two-year, four-year non-selective, and for-profit colleges, and the failure of some students to complete their programs for a degree that could equip them with employable skills are what caused the debt crisis.
The student loan crisis has also affected other sections of economy as borrowers postpone purchase plans, including those for homes and cars. Meanwhile, governments’ forgiveness and forbearance programs have put their own finances under further strain.
Although limiting the increase in higher education costs is one obvious solutions, implementing regulations has proven to be difficult.
The only way for students to avoid the debt trap is for them to carefully review their college plans keeping in mind the tuition fees, the financial implications of funding their higher education plans with a huge loan, and the likely job market they would have after graduation.
What’s student loan debt?
Student loan is a form of debt that a current, graduated, or formerly withdrawn student owes to a lending institution.
The loan is repayable to the student’s school or lender even if the student drops out of school, or if the student has graduated but is underemployed.
As in the case of other types of loan, a student loan is considered defaulted if there is no repayment of installments for a particular period.
In such instances, the loan is turned over to a student loan guarantor or debt collector, or the borrower is granted loan forbearance or forgiveness.
Solutions to student loan debt crisis
Here are a few solutions suggested by financial experts to resolve the student loan debt crisis:
- Reduced cost of college attendance
- Tuition assistance to underprivileged students
- Free or low-cost degree programs
- Student loan provider regulation
- Loan forgiveness for health sector and education professionals
- State tax credits, refinancing plans for borrowers
Student loan debt statistics
Here we take a look at some facts and figures of the student debt crisis in different countries:
- Student loan debt statistics in USA
- Student loan debt statistics in Canada (coming soon)
- Student loan statistics in UK
- Student loan statistics in India