40% of College Graduates Have "Unmanageable Debt Level"

The average student borrower now graduates with $27,600 of debt, almost three and a half times what it was a decade ago. 84 percent of black students and 66 percent of Latino students graduate with debt. And 39 percent of all student borrowers graduate with unmanageable levels of debt, according to the Department of Education.

Add to that young people's average credit card debt of over $4,000. Set aside your stereotypes of irresponsible youth: Over 70 percent of undergraduates use credit cards to buy school supplies, food and textbooks. 24 percent use their credit cards for tuition. Credit card companies are becoming the high-interest student loan industry of last resort. When it's all totaled up, young people spend 25 percent of every dollar earned on paying off debts and loans.

Federal policy isn't keeping pace with reality. Soaring education costs and inflation have not been met with aid increases. Caps on federal student loans have forced students to seek private loans, which were up from $1.1 billion in 1995-96 to $10.6 billion in 2003-04.These loans have much higher, often predatory, interest rates.

Today, the average Pell Grant covers only 40 percent of college tuition, compared to 77 percent 25 years ago. And under President Bush, the Department of Education revised Pell Grant eligibility guidelines, effectively excluding almost 100,000 young people from the program and reducing grant money for another 1.2 million.

The war on the middle class continues. College it is a ticket to indentured servitude.

Students are graduating with huge debt bills because state legislators have decided supplementing higher education is no longer important.

Let’s look at this from a timeline perspective. Student X graduates college with $27,600 — the average amount of graduate debt. Now student X decides he wants to become a doctor. There’s another 7 years of debt. Law school? – another three years of debt. Several people who I went to law school with were near $100,000 at graduation. How can these people even think about saving any money?

Here’s something else to think about: this level of debt discourages people from pursuing careers in lower income professions such as teaching. What’s the point in being a teacher if your salary won’t pay for the education you got to become a teacher?

How about this: by starting people into the world of debt at an early age, we are now encouraging people to take on ungodly levels of debt throughout their life. Debt is now OK – regardless of the level. College is now a debt trap.
Permalink by Hale Stewart

Anyone notice the minorities have the highes ratio? And then wonder why we don't continue our higher education in profesional schools and stuff. It's easier said than done especially when we're expected to be working or studying poor for 6-10 years min just while in school not counting the post school period. I think this also explains the expanding gap between rich and poor. Those that make it even with the debt and those that choose to live within there means or need to tend to more immediate matters such as family or other things. This really needs to be changed but how?