US Economy dwindles with the rise of student loan debt
Student debt is considered to be an alarming concern in the US economy as it is paving the path for another economic disaster since the great depression. The austerity of the student loan debt has been a major concern as the post graduate students are finding it difficult to pay back.
The students are crushed under the burden of loan that they took out 10 or 20 years ago. The student loan debt leaves a long term effect in their life.
The impact of the student loan debt can have a dramatic effect on the mind of the young generation. Presently, the total outstanding balance on student loan has exceeded $1 trillion that is more than the amount incurred on credit cards. Mr. President has realized that the higher education expenses are one of the root causes for people resorting to student loan.
Therefore, a student graduating with English Literature major from an expensive private university will be stressed to find extra source of income if he is offered low paychecks. The job scenario has not improved yet after the recent economic meltdown,. Higher education expenses raised by 5.4% suddenly, a warning for the government as the demand for loan will also rise and it might pave the path for debt. In order to secure a high wage job the students are taking up courses that burn a hole in the pocket.
Average student loan debt is near about $25,000 that is taking a serious shape in the face of the economy as the amount is rising incessantly. The outcome of this calculation is not only a grave concern for the students but for the US economy as the debtors often defaults on their payment. Now the debt stricken consumers are allotting their entire earning to pay off the student loan debts. Therefore, these young people have become beast of burdens as they carry the stress and are pressurized of paying off the debts.
Remember that debts not only prevent consumer discretionary purchases but recently they are resigning from their job to pursue self-employment. They are keen to start their own business to increase the source of their income as the job sector has not yet recovered from the blow of the economic depression. The government is offering grants and scholarships to students so that they can avoid further damage on the economy.
But the government is not offering educational funds to public and also not lowering the interest on the student loan. The federal government is now discouraging people to pursue education on area that will not give proper investment return. If you get a high paid job then it will be easier to pay back the owed amount.
Here are a few tips to eliminate your student loan debt:
1. If you have insurmountable amount of debt then you can apply for Direct Consolidation Loan offered by the US Department of Education. The interest on the federal loan will be made affordable to pay off the owed amount.
2. Visit the website www.loanconsolidation.ed.gov and click on “for the borrower” to apply for a direct consolidation loan.
3. Private and federal student loan is not allowed to combine according to the standard policy.
4. You can take out loan on affordable interest rate from private lender to pay off the owed amount. You can also apply for income based repayment plan then it might be easier for you to repay the owed amount.
5. The graduates can volunteer in national community work and get payment from the Americorps. The students who are unable to pay off the debts can utilize the money to pay off to eliminate their obligations.
Therefore, these are the five essential ways to repay the debt and save economy from colossal financial collapse.
[Sidney Terrell is an associate editor with Oak View Law Group. She is also a guest columnist, blogger, and a small time entrepreneur. Sidney writes on a wide range of topics including debt consolidation, debt settlement, bankruptcy, and investment opportunities.