Millions of Americans Cannot Pay Back their Student Loan Debt – Video
The Department of Education has released a report that exposes billions of dollars of unpaid student loan debt. The data reveals that more than 40% of Americans are not paying back their student loans. This translates into a combined value of over $200 billion of unpaid student loan debt. Of these borrowers, about 3.6 million have been placed in default with a value of $56 million in debt. 22 million Americans have borrowed money to attend college. Of these borrowers, only 12.5 million have been paying off their student loans.
The data says it all: Americans cannot financially keep up with the skyrocketing cost of getting a college education.
The American Educational system is a double bind. The idea of getting a college degree is so that the student can get a better paying job and make a livable wage or better yet pursue the “American Dream”. However, in order to attend college, the American must be able to afford the cost of education, housing, food, etc. Without a college degree, it is challenging to even make a “livable wage”, let alone pay for a college education. Even a student working full time at a minimum wage job cannot afford to attend college without taking out loans. The issue at play here is that student will have to take out nearly the entire cost to be able to finish school. This stacks up to thousands of dollars of debt that burdens the borrower for many years.
There are many reasons why borrowers are unable to pay back their student loans. Upon graduation, many students have already been burdened with insurmountable debt. This creates challenges for young people who want to get a mortgage for a home or even obtain a loan for a car. In addition to these issues, fresh graduates are not making enough money to payback their loans since they are typically working entry-level jobs that don’t pay well.
These findings from the Department of Education begs the question: What happens to these borrowers who cannot pay back their student loans?
The borrowers who have not paid will have their loans placed in default. They will not be arrested for missing their loan payments, however it is strongly advised not to miss payments to avoid financial conflicts. Falling into default is financially devastating to borrowers. It heavily impacts the borrower’s credit and financial future.
In the midst of the student loan debt crisis, not all hope is lost. This year’s report is an improvement from last year. This can be credited to the various loan repayment programs that have been established, such as income-based repayment plans and debt forgiveness programs. There has been a 50% increase in borrowers signing up for these programs in the last year alone. It is expected that there still be more and more Americans signing up as more improvements are made to the programs as well as the access of information. Although it is an improvement from last year, we still have a long way to go until college can be more accessible for any American.
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