US Economy dwindles with the rise of student loan debt

By   |  December 23, 2011

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.

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5 Comments on “US Economy dwindles with the rise of student loan debt”  (RSS)

  1. Just looked up bankruptcy in the USA. You have been screwed the same as in Canada. most student loans are non-dischargeable (see 11 USC 523(a)(8), which says that student loans may NOT be discharged in bankruptcy if they are “for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor�s dependents.”). The enslavement of the USA is complete.

  2. This another case of the banksters ensuring the enslavement of the people. In Canada (I am not sure about the USA). The government under pressure by the banks passed a law taking bankruptcy of the table as an option for students. Since then the student loans skyrocketed and the students are now left with degrees (From accredited and for profit colleges) that gets them nothing but a dream of a paying job. If they are lucky enough to land a job, it is usually at an entry level minimum wage position. Some are realizing that that student loan they signed for was tantamount to being sold into slavery. Corporate owns the government and it will need a revolution to remove them. Any history buff can look back and see this follows a pattern. The US Constitution freed the people momentarily. Banking and Corporate interest finally won the day in 1913 when they handed over the country to the Bank of England via the Federal Reserve. Which is wholly owned by the Bank of England. It only took 137 years to win back what they had lost in 1776.

  3. It’s crazy how expensive college (even public college) has become! Some students are now making money by helping others with their work on our website: http://www.scholarrescue.com … we think it beats graduating with $25,000 worth of debt or flipping burgers!

  4. This unfortunately is is the hard truth for college students today. Maybe transferring is the answer. See what you think. http://andrewdibb.blogspot.com/2012/04/making-big-decision-transferring.html

  5. Find out tips about debt consolidation services and how to get rid of debts. Debt Consolidation to Eliminate Debts Pay Smarter to Save Thousands, we advice you for free.

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