(Article changed on April 2, 2014 at 01:09)
10 Things I Teach My Children About Surviving the Student Loan Crisis
By Ali Hangan
1) Should I go to college?
Yes, the working class
student must attend some form of college or advanced training beyond high
school to earn an income that will meet their basic needs, to survive in the
modern economy.
2) What are the current job
prospects for recent college graduates?
Over 50 percent of new
college graduates are unemployed and 36 percent find jobs that do not require a
college degree. College graduates working for minimum wage has risen 71 percent
from 5 years ago.
3) Should I take out a student
loan?
No, but if you must take
out a student loan, borrow no more than $10,000. You want your payments
to be no more than 10 percent of your monthly net income. If the lowest wage
you can earn is $10 per hour, say working at Wal-Mart assuming the federal
minimum wage will be raised from $ 7.25 to $10, working full time should net
you about $1,100 per month after taxes. If you qualify for the Earned Income Tax
Credit, you will be able to keep most of your wages. A $10,000 loan at 3.8
percent interest over 10 years will be a payment of about $115 per month. This
is an affordable payment for a college graduate that is just entering the job
market.
4) What's the cheapest way
to get a college degree for a working class student?
Start at community college
then transfer to a state school.Take a few online general ed
courses that can reduce the cost of your degree Apply for a Pell grant, which is a
federal loan that does not have to be paid back. finally, get a wage-slave job in fast food
or retail to help pay for books and supplies while in school.
5) How many college
students are going into debt to pay for college?
70 percent of college
graduates have an average amount of $30,000 in student loan debt. Students who went to a university
for a graduate degree, borrowed $57,600 in 2012, a 43% increase from $40,209 in
2004.
6) What is the current
total outstanding student loan debt among recent college graduates?
The total outstanding student debt is 1 trillion dollars and
growing annually. That is nearly 6% of the total outstanding debt for the
entire nation. Some estimates project that the total student loan debt will be
3 trillion dollars in 10 years at the current rate of borrowing.
7) How many college
graduates have defaulted on their student loans and what are some consequences
if a student defaults on their loan?
One in 10 recent borrowers
have defaulted on their federal student loans within the first two years, the
highest default rate since 1995. The IRS can take your tax return and go after
your wages. In some states, driver's licenses have been suspended and
professional licenses have been revoked. In Tennessee, some 40 nurses lost
their licenses over defaulting on their student loans.
8) What will the ratio of
income to student loan debt be in the next 10 years among college graduates?
The average amount of debt
college students will leave school with will equal what the median graduate
will earn in just a year. After 10 years, at the current rate of borrowing, the
average student loan debt will exceed the average college graduate's income.
9) Why are jobs
opportunities for college graduates decreasing and what is the long-term
consequence for the economy, if student loan debt continues to grow at its
current rate?
The Capitalist system goes through
accelerated or revolutionary periods of growth in technology. The economy has
entered into a period of revolution in computer software and robotics. Various
forms of these technologies are being rapidly adapted to carry out tasks
previously performed by humans. The rapid pace that technology is replacing
jobs in industry stands to decrease job opportunities for college graduates to
pay off their student loans. It we take into account the 1 trillion
dollars in outstanding student loan debt and projected 47 percent of jobs to be
replaced by technology, according to some studies, the conditions are being set
for an economic crisis that will rival the economic crisis in 2008, resulting
in a broad ripple effect in the global financial system, industry and costing
millions of jobs.
10) What can I do to avoid
the economic crisis?
The social inertia behind
100's of millions of people acting on their own economic self-interest is so
substantial that, no individual, social class or government agency can stop or
avoid being effected by this growing economic crisis. The one recourse a
working class, college student has, is knowledge that this economic crisis is
predictable. So plan now, to protect your survival needs for the future.
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