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Debts due to student loans exceed debts on credit cards

Saturday, April 23, 2011

Currently amounting to around $800 million, student loans have exceeded credit card debts. As per reports, the student loan debts, which are likely to reach the trillion dollar mark this year, have crossed credit card debt for the first time. As per the stats, 2/3^rd of the bachelor degree holders passed out in 2008 with debt, which is significantly higher than the number less than ½, way back in 1993. Graduates with student loans had an average debt in excess of $24,000 last year. The student loans are expected to climb with more budget-slashing around the corner. There is anticipation of cuts in federal PELL grants as well as the HOPE scholarship programs in Georgia. This could lead to a further rise in the student loans.

Experts in educational policies feel this could have some broader implications as far as education of students is concerned. This is because students who will leave college with a debt will have different choices to make and the more the number of such students, the deeper the implications. In fact, those who are paying off student loans cannot really think of options like starting a family, buying a home, saving for kids’ education, etc.

Therefore, it is time, aspiring young people need to reconsider their plans and the financial support that they have. In fact, students should even reconsider the benefits of going to technical college and check if their favored career path still has the charm that it once held. The long term value of college has to be considered.