The price of college tuition has received a lot of attention recently. Many people are worried about the skyrocketing prices. Whether you are a student that has to sign the loan, a parent that has to co-sign the loan, the college graduate that is overwhelmed by debt or a high school aged student that doesn’t know how to pay for college the ever increasing price of college may be something that is weighing on your mind.
A recent study showed that more and more college students are struggling to repay the private student loans that they took out in school. The report that was done by the Consumer Financial Protection Bureau and the Department of Education showed that from 2001 to 2008 the private student loan market grew from under $5 billion to over $20 billion. Then, after 2008 there was a decrease in the market again as banks began to raise the credit standards for their private school loans. In 2011 90 percent of undergraduates had co-signers, which is indicative of the tightened credit standards.
Interestingly, this pattern of school loans is similar to the subprime mortgage lending that resulted in the busting of the housing bubble. Lenders began to make exceptions for students with poor credit and lenders were providing money to students without much regard as to whether or not students would be able to pay back the loans.
After the financial crisis in 2008, it seems that more financial prudence is being used. Lenders seem to be ensuring that students are not taking out more in loans then they need.
Even with more financial prudence, there are many students that find school loans are necessary to fund their education. With college tuition doubling in the last decade and some estimates showing that student loan debt has grown to over $1 trillion, there may be no easy answer for those students attending an expensive college that do not have the funds to pay tuition.
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FAQ
Q: What are the challenges faced by individuals dealing with student loan debt?
A: Individuals with student loan debt often face challenges such as high monthly payments, long repayment terms, and the potential impact on their financial well-being and ability to save for the future.
Q: Are there loan forgiveness programs available for those burdened with student loans?
A: Yes, there are loan forgiveness programs that may provide relief for borrowers, especially those in certain professions or with specific federal loans. These programs can help reduce or eliminate student loan debt.
Q: What strategies can individuals employ to effectively manage and reduce their student loan debt?
A: Strategies include income-driven repayment plans, loan consolidation, refinancing, and budgeting to prioritize loan payments. Exploring available options and seeking professional guidance can also be beneficial.
