Although the job market is improving after the banking crisis in 2008, the same can’t be said about increasing student loan debt. During the past 30 years, U.S. college graduates now owe more than one trillion dollars in student loan debt, exceeding the total amount of credit card debt.
Amid a 7.6 percent unemployment rate in Washington it’s no wonder that graduates are having difficulty paying off their loans. There is not enough focus on job searching when students decide to sign their names to these loans.
Maddie Moak, student at Pierce College, identified what’s at the heart of these issues that have turned into a problematic cycle.
“When students take out these loans they are less focused on finding a job and mainly concentrating on their studies,” Moak says. “Since finding work in this economy is impossible it comes as a surprise to those who were unfortunately ill-prepared.”
In February, Spring Arbor University, Michigan, announced they are aiding their incoming class by enrolling them in a loan assistance program.
After graduation these former students must work 30 hours per week, and depending on whether they earn less than $37,000 per year will receive aid.
“Spring Arbor University wants to provide students and their families with a peace of mind,” Spring Arbor University President Charles Webb said in recent Huffington Post story.
For some institutions, such as Yale and the University of Pennsylvania, students who default on their loans have been sued.
Pierce student Cristin Collins says the student should be responsible for paying off any neglected loan charges.
“Students should understand their responsibilities and obligations of loans they take out,” Collins says. “When taking a loan out, even for educational purposes, students shouldn’t exempt themselves from being accountable for paying back their loans.”
One well-known loan is the Federal Perkins Loan, which helps graduates and undergraduates pay for college with a nine month grace period before the first payments are due.
Normally, undergraduates are eligible to receive $5,500 a year, while graduates can receive $8,000; amounts will vary depending on the availability of funds the college has at its disposal. Students at Pierce can receive up to $4,000 each academic year under the Perkins Loan.
Most student loans are ineligible for bankruptcy proceedings, and unpaid student loans can also garnish social security benefits.
The only circumstance where bankruptcy would be eligible is if the student is physically unable to work and has no other way of making a steady income.
Pierce student Tyler Himmelberger raises concern that financial aid, such as loans, helps people but puts them at a financial disadvantage when the time comes to collect.
“People who rely on financial aid to get through college are at a loss given the current economy,” Himmelberger says. “With the job market the way it is and more people in debt to these colleges make it impossible for people to pay back their loans. I honestly don’t see how the nation will get out of such deep debt when barely any effort is being put in to fix it.”
The Puyallup Post is the award-winning student news of Pierce College Puyallup in Puyallup, Washington. Copyright The Puyallup Post 2017. Twitter/Instagram @puyalluppost
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