Going to College Can Ruin Your Life

Paying off student loans is extremely difficult for many borrowers.

Paying off student loans is extremely difficult for many borrowers.

Young Americans who used student loans to defray college expenses are facing life after college with crippling debt. The program that the federal government implemented for the purpose of giving young people a step up toward social mobility has instead become a major factor in limiting those young people’s ability to achieve financial success. One borrower said, “I feel I kind of ruined my life by going to college; I can’t plan for an actual future.”

According to a survey conducted by American Student Assistance (ASA), student loan debt impacts the way student borrowers make lifestyle decisions. Among the findings: 27% of respondents said they found it difficult to buy daily necessities because of the loan; 63% said the debt affected their ability to make large purchases such as a car; 73% had to delay saving for retirement; and 75% said the loan affected the decision or ability to purchase a home. Additionally, 43% said debt has delayed their decision to start a family, and 29% said they have delayed marriage because of the loan debt.

Although funds for student loans are provided by the federal government, the student loan program is privatized—profit-making entities issue the loans, and profit-making entities collect loan repayment—thus establishing interest rates and monthly repayment amounts that students are expected to make after graduation. In recent years, middle class jobs eroded and middle class incomes stagnated; consequently, paying off the student loan is a significant burden for many a borrower.

Currently, about 42 million Americans owe $1.3 trillion in student loan debt. According to Consumer Financial Protection Bureau, one in four borrowers is behind in their payments, and 7.6 million are estimated to be in default.

In 2010, the federal student loan program was revised so that the government – not profit making entities – loans directly to students. In 2013, new regulations were introduced that limit a student debtor’s loan repayment to as low as 10% of the debtor’s discretionary income.

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