I know it may sound strange to say that the fate of the economy relies on your student loans. It makes one wonder if such a statement has any validity. The best way to approach this subject matter is by educating yourself with a few indisputable facts.
There are over 20 million people who attend college each year. Twelve million of the 20 million apply annually in order to cover their educational costs. In the United States the average student loan debt is approximately $24,000. If you were to add all of the student loans together it would equal well over $1 trillion, which is more than the total amount of debt accumulated by credit cards.
At first the numbers sound surprising, and possibly blown way out of proportion. Well lets consider the sources. The numbers you are reading come from, The Boston Globe, The Chronicle of Higher Education, and Forbes magazine. Unfortunately the figures in this article are real.
There has been a huge leap in the number of delinquent loans in the past five years. The numbers have gone from 12.4% to 15.1% which equates to millions of dollars. According to industry financial experts this growing problem is headed towards catastrophe.
Now that you understand the facts, I will connect the dots between the U.S. economy and student loans. Once a graduate fails to pay back their student loans, their credit begins to plummet. With bad credit the student loan holder, also known as the consumer cannot invest in the economy e.g. buying homes, cars, starting businesses etc. All of those things are what strengthen the economy.
To make matters worse according to the latest reports, the job market is not in favor of the graduating class of 2013. According to Mark Koba senior editor at CNBC a study was conducted by the National Association of Colleges and Employers. This study stated that business will only hire 2.1% of this years graduating students. This number is way different from the 13% that was previously reported.
This is a serious matter and like it or not the fate of the country is in your hands. Make sure you are armed with the critical information regarding your loans and you know the ins-and-outs. Federal loans are setup to be repaid with in a 10 year time frame. Perkins loans, are structured so that they student has nine months after graduation before having to repay the loan. On average most loans allow six months.
It is important that you take the repayment of your loans seriously. Once you are nearing graduation time, start sending out resumes right away. Send them out to any and every one.