The Walls Street Journal had an unbelievable and scary article on the state of student debt in this country
A record $89.2 billion of student loans was in default at the end of June, New York Federal Reserve data show. Of the $1.48 trillion outstanding, 11%, or $160 billion, was at least 90 days behind on repayments—and the true rate is likely double that, because only half the loans are currently in repayment.
Source: WSJ
It never stops amazing me how students in this country can get into so much debt by trying to acquire education and the means to make ends meet. A high school friend of mine has a 6-figure student debt with monthly INTEREST payment of $500. I personally know people from my university in Omaha who accumulated debt and struggle to find jobs. Jobs may wait to meet us, but the bills and interest usually can’t wait to break us.
There is a proposal from some politicians to wipe out student debt. It’s impractical and what problem does it solve? The debt will fast pile up again for the next generations. I don’t think anything will change unless there are solutions to the issues:
- Ridiculously expensive tuition fees for degrees that fast decrease in value
- Laughable expensive books that benefit no-one but publishers and professors who work with them
- Lack of knowledge on personal finance by students
Of course, the reality is highly complicated. Yet, I believe it would be hard to think of a worse scenario than what we currently face. Real solutions should be in place, yet the graph above shows that none has been since 2004. Else, the amount would have gone down instead of going up. If other countries such as those in Nordic countries, France or Germany or many other in Europe can get it done, why can’t the US?
Minh Quang Duong 