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Generation Debt: Student loans, credit cards leave college students strapped for cash for years to come
Destree Reamy, Contributing Writer, dreamy@smu.edu
Issue date: 5/1/07 Section: News
Invisible money empowers the young adults in today's society. Young adults tend to look at money as a black and white amount on a monthly statement that they receive from creditors. The concept of debt is lost on the 20-somethings because the reality of repayment is not assessed until it is too late.
Student loans, credit card debts, car loans and living expenses all contribute to the 20-somethings' debt. This is a reality that they can not escape because for the majority, borrowing money is the only way to achieve a higher education or to pay for living expenses while in college.
Rising tuition costs and the high price of living are making it hard for the Generation X's and Y's to ever get ahead. Taking out loans to pay for a college education is completely normal for today's generation.
The government and private loan companies have made college financially possible, although with that opportunity comes long-term payments and mounting debts.
The current tuition cost at Southern Methodist University is a mind blowing $41,705, and for many students their parents do not have that kind of money to dole out, therefore causing them to turn to financial aid. According to Project on Student Debt, at least 10 percent of seniors at private universities graduate owing at least $40,000 in student loans.
While taking out enough financial aid to pay tuition bills is one thing, many young college students max out their loans in order to live a life of leisure while in school. Many students do not consider their mounting debt while in a college and the interest that has accrued through the years.
Those students, from lower income families, who qualify for educational grants from the government, on average owe 12 percent more in education debt than those just receiving educational loans according to Project on Student Debt.
Within the past five years, 3 percent of the 20-somethings owe more than $20,000 in student loan debt, according to USA Today. Although this is not the best place to start their finances as an adult, this is their only option. "This debt-for-diploma system is strangling our young people right when they're starting out in life," says Tamara Draut, author of "Strapped: Why America's 20- and 30- Somethings Can't Get Ahead."
Student loans, credit card debts, car loans and living expenses all contribute to the 20-somethings' debt. This is a reality that they can not escape because for the majority, borrowing money is the only way to achieve a higher education or to pay for living expenses while in college.
Rising tuition costs and the high price of living are making it hard for the Generation X's and Y's to ever get ahead. Taking out loans to pay for a college education is completely normal for today's generation.
The government and private loan companies have made college financially possible, although with that opportunity comes long-term payments and mounting debts.
The current tuition cost at Southern Methodist University is a mind blowing $41,705, and for many students their parents do not have that kind of money to dole out, therefore causing them to turn to financial aid. According to Project on Student Debt, at least 10 percent of seniors at private universities graduate owing at least $40,000 in student loans.
While taking out enough financial aid to pay tuition bills is one thing, many young college students max out their loans in order to live a life of leisure while in school. Many students do not consider their mounting debt while in a college and the interest that has accrued through the years.
Those students, from lower income families, who qualify for educational grants from the government, on average owe 12 percent more in education debt than those just receiving educational loans according to Project on Student Debt.
Within the past five years, 3 percent of the 20-somethings owe more than $20,000 in student loan debt, according to USA Today. Although this is not the best place to start their finances as an adult, this is their only option. "This debt-for-diploma system is strangling our young people right when they're starting out in life," says Tamara Draut, author of "Strapped: Why America's 20- and 30- Somethings Can't Get Ahead."
Viewing Comments 1 - 1 of 1
rhonda
posted 5/15/07 @ 8:44 PM CST
My son is very depressed, he just graduated from school and now he has a
huge student loan debt. He also feels like he wasted his time going to school. (Continued…)
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