College may be more expensive than ever before, but the cost of not going to college is pretty steep, as well. For the most part, college graduates earn more, have lower unemployment rates, and are less likely to live in poverty than their less-educated peers. But that doesn't mean that it's easy to pay student loans with a recent graduate's salary (or potential lack thereof, depending on the job market upon graduation). In fact, PayScale's College ROI Report shows that the highest college loans are likely to be held by the borrowers with the lowest income.
The student loan debt crisis is having a real impact on individuals and the economy in general. As a result, some lawmakers want to encourage employers to help their workers pay down their student loan debt. One proposal, for example, would grant businesses and workers a tax break.
If someone asks you how much you get paid, you probably answer with a dollar amount (or politely ask them to mind their own business). But the real value of your compensation comprises more than just the numbers that appear in your direct deposit at regular intervals. Perks like health insurance, 401(k) match, bonuses, and so on, save you money or make you money and contribute directly to your bottom line. Now, a few companies are introducing what might be the ultimate money-saving perk: cash to repay student loans ahead of schedule, thus potentially saving employees thousands in interest.
Over 67 percent of college seniors had taken out student loans as of the 2011-12 academic year, according to The National Center for Education Statistics. That same year, the student loan default rate reached 10 percent. Obviously, no one enters school planning on defaulting on their student loans – defaulting can ruin your credit, impacting everything from your ability to get a mortgage or a car loan to getting hired for your dream job. PayScale's College Salary Report shows how college choice affects ability to earn enough to pay back loans; to help students avoid common mistakes when taking out their first loans, we spoke via email with Anne Del Plato, Regional Director for U-fi Student Loans.
Sen. Elizabeth Warren has been making plenty of headlines over the past few months. Between a grassroots campaign (unsuccessfully) demanding her run for president; a spat with Jamie Dimon, the head of JPMorgan Chase; and the demand for student loan reform, she continues to assert herself as a progressive champion. But is there hard data to vindicate the ideals that have garnered her a cult following?
By now, we probably all know someone who struggles with student loan debt or job woes. Many of us young folk went to college hoping to make our dreams come true, only to find ourselves saddled with enormous debt and no job prospects. Young grads are still having trouble nailing down that first professional job, and many people aren't working in the industries they trained for. It wasn't exactly a walk in the park for older people either, whose careers went kaput and they had to go back to school or get new training. Stories from the Great Recession are many among us.
Calculating risk is a complex process, particularly in the competitive student loans market. Basing decisions on potential earnings rather than current assets and income, as banks traditionally do, makes more sense when it comes to loaning to young people. Now, some companies are turning to social media, and checking out clients' connections, in order to assess the risk of the potential borrower, and also to put pressure on those who default.
Four years ago, I was sitting in my college dorm in Conway, Arkansas, wondering why paying $39,290 a year possibly made sense. I had come to college with hopes that it would make me a better person, but I soon realized that I would learn far more by going out to experience that world, rather than paying people tell me about the world. Disillusioned with school, I left.
Recently, billionaire investor Mark Cuban declared that fixing the student debt crisis is the most important thing our government can do to restore the national economy. His idea: cap federal student loans at $10,000 per student, per year. Few would argue that student loan debt isn’t a problem of epic proportions, but Cuban’s explanation of the crisis and his solution resulted in mixed reactions.
College is often touted as a requirement for a high-paying job, or a ticket to the middle class, especially for low-income students. However, college is also growing increasingly unaffordable for everyone but the most well-to-do families.