With college applications season in full swing, the only thing on every senior’s mind is this: what colleges to attend? What courses to opt for? Which country to go to? And last but not the least, how much will it cost? Taking on a very practical outlook, every parent or guardian has a certain budget for his or her child, beyond which it is difficult, if not impossible, for them to spend. So what is the plan of action, in cases where financing an education is tough? Taking a student loan, of course.
Urban Dictionary defines a student loan as “a mystical transaction in which a student and/or parent subjects themselves to financial slavery (indentured servitude) for the foreseeable future”. If these are the kind of definitions that are being put up, there is something seriously wrong about taking a student loan. Student loans are becoming a common thing in today’s world, mainly due to the toll the financial crisis took on people since 2008, but students and their parents/guardians don’t always know what they’re getting into.
The Economist reported in June 2014 that the USA alone had more than $1.2 trillion of student debt, out of which more than 7 million debtors were in default. That would mean that nearly 7 out of 10 seniors who graduated in 2013 out of public colleges or non-profit colleges had student debt hovering over their heads. Till September 2012, on an average, a Canadian student leaving college had a debt of $28,000 or more on his or her young shoulders.
With the market condition still fairly delicate, getting employment is not as easy today as it was nearly 8 years ago. Having a degree in hand from even an average college does not guarantee a job, which makes the situation even harder for students trying to pay back loans. Moreover, due to the fragile condition of the global economy, promotions are harder to come by, and so are bonuses, because of which students take a much longer time to pay off loans than they would have in a stable and strong economy.
Education has always been emphasized to be utterly necessary for every girl or boy out there in this big world, but have we stopped to think what it might cost them? It would result in them taking nearly 6-7 years of their working lives to pay off their debts, further reducing their earnings after paying instalments and resulting in the slow growth of the debt-ridden youth.
Parents have always wanted the best for their children, and that is a fact in almost all cases. But both parents and students need to understand what they might be getting themselves into, before they dive into it head-first. While some banks offer fairly reasonable interest rates on student loans, others may not grant time concessions in the event of financial shortage. While it would be preferred that students don’t take student loans, that can only happen in a fantasy world. So till then, the best we can do is try and prevent students from at least opting for banks that might lead them straight into debt traps.
What I’m trying to say is this:
Education is important for an individual to survive and flourish in the 21st century but it comes down to simply this; we’re educated, but at what cost?