The American dream has become the American farce for Generations Y and Z.
Student loan interest rates doubled to 6.8% on 1 July until Congress reached an agreement to change them back weeks later. This isn’t some small special interest issue; it impacts 40 million Americans.
Indebtedness has become a ravaging disease infiltrating our US waters, and there doesn’t seem to be a cure to stem the tides of suffering that so many of us are dealing with at present. There are more questions than answers on how to remedy this unpleasant situation. To his credit, President Obama recently conducted a town hall at the University of Buffalo to discuss his new plan to attack student loan debt for numerous citizens drowning in it.
“A higher education is the single best investment you can make in your future and college has never been more expensive”, Obama said during his speech. And he is right. According to the College Board & Advocacy Policy Center, the cost of a private nonprofit four-year college institution has risen 267% over the past 30 years. Within the same time frame, the cost of a public four-year college institution has risen by 357%. The average student loan debt for graduates stands at $26,000.
In the past nine years, the average student loan balance has exponentially grown from $10,649 to $20,326. Outstanding student debt totals $1.2tn in the US. The new initiative being put forth by Obama and his administration is to create a new college rating system by 2015 and tie federal aid to that rating system. It remains to be seen if this idea can become actual law. Congress is currently on vacation and some would argue that they’ve been on vacation for at least four years.
But this issue is becoming more problematic by the day.
After speaking with many of my peers, we utter the same frustrations about our current perilous financial situations. Some have said, “Why did I go to college if this was going to be my outcome? I don’t understand how this system is designed, but something must be done to change it.” How did we get here?
Children are told when they’re growing up that college is their only option because it’s a cold, dog-eat-dog world out there. But what gets lost in translation during our formative years is the value of a dollar and how to manage our finances. Does the fault fall at the doorstep of our parents or with us for not inquiring about the promise of our futures? Due to our lack of fiscal responsibility, it’s not until we’re adults that we’re forced to deal with these economic misfortunes and by then it’s rendered inconsequential because the damage has already been done.
Speaking from personal experience, I attended a four-year institution and I was the recipient of federal Pell grants, but the bulk of the money I received were through federal and state student loans. A week after I walked across the stage to receive my degree, agencies were calling me non-stop to consolidate my outstanding student loans. The result is a 30-year-old man drowning in $45,000-plus in student loan debt.
The degree I earned didn’t land the optimal occupation to afford me the luxury of paying back the lolly I owe. Little did I know that by declaring forbearance on a student loan, your interest rate that was supposedly “locked in” accrues slowly, which increases the principal on the overall sum of your consolidated loan. Since graduating in 2006, I’ve been unemployed twice for long periods of time due to the atrocious job market.
This is a similar predicament that other citizens are dealing with at the moment. Debt is the 1,000lb gorilla on our backs, preventing us from climbing the ladder to reach the next chapter in our lives. The system is designed for us to fail. The future of a country is dependent on how successful its citizens become once they’re integrated into the flow of their economic stream. So, what does it say for a country when it keeps the youngest sectors of its society in a consistent, unjust system of financial enslavement where they’re bound and chained until they reach middle age?
Ambrose Bierce once said: “Debt is an ingenious substitute for the chain and whip of the slavedriver.”
The truth is, debt has become the biggest investment in the economic longevity of this country and it may be the very reason why we will succumb to another catastrophic great depression.The unprecedented amount of outsourcing and obstruction from one political party has left many people my age or younger fighting for crumbs instead of slices of the American economic pie.
The US has enrolled at IOU University where no one graduates until his debt has been paid in full.
Americans owe some $856.5bn in revolving credit, according to July 2013 figures from the Federal Reserve. Most revolving credit is credit-card debt. Student loans outstanding today both federal and private total some $999.3bn, a 6.1% increase from 2012. There are close to 40m Americans that graduate from a four-year public university with student loan debt. Over the next decade, the US government is scheduled to generate $185bn from student loan debt.
Some would argue it’s a young person’s singular choice to go to college, but when you’ve been almost brainwashed by the larger society into believing the only way you’ll be successful is by attending college, what are you supposed to do? College is the biggest business there is on earth, period. Don’t get me wrong, college can cultivate, educate and change an individual for the greater good, but when someone is handcuffed financially by the cost of it for decades after graduation, what’s the point?
The cost of going to an institution of higher learning keeps rising while the prospect of gaining employment afterward is lessening. There is a grave imbalance at play, and there are no answers to solve this plight. The president’s latest plan isn’t enough. Until corporations stop outsourcing jobs and our country returns to being innovative about new job creation, students and their debt will continue to be the economic backbone on which our society leans on.
With that, welcome to a new school year.
Source: Chris Williams The Guardian