This year, 2016, has not even ended yet, but a class of 2016 graduates has already incurred about $37,172 in student loan debt, which is about 6 percent higher from 2015. Right now, over 43 million Americans are in debt because of student loans, and the amount they owe is over $1.3 trillion.
Yes, America has a student loan debt problem. Costs of a liberal arts education have risen to unprecedented amounts that no average American can afford college without going into debt. What’s the alternative? Not go to college? Statistics show that people who are only high school graduates earn far less than their college-educated counterparts. It seems like the system is rigged in favor of debt.
So, if you are a high school graduate or a nontraditional student who wants to go to college, obtaining a student loan is a question you will have to address head on. Be aware that this is not an easy question to answer. In the past, most people thought that they would be able to pay off these loans quickly soon after graduating. After all, a college education is an excellent investment, right?
It Depends on Your Major and the Amount You Borrow
First of all, understand that not all majors are made equal. Your future ability to pay off your student loans will depend on the profession you choose, which is not necessarily determined by your major. For example, imagine that you major in English. Now, what will your job prospects be? High school teacher, writer, or poet? None of these are known as highly lucrative professions. Now, if you took out hundreds of thousands of dollars in student loans to go to a fancy college and major in English, you will most likely not be able to pay it back soon after graduation.
On the other hand, consider a major like petroleum engineering. People who become petroleum engineers enter a job market that highly demands their skills and pays well for them. So, if you took out hundreds of thousands of dollars to pay for a high-demand major such as this, you will be in a better position to pay it all back.
Sometimes the Interest Rates are Far Too High
Here’s the ugly truth most students don’t realize about student loans: they come with sky-high interest rates. Even if you become a petroleum engineer or a doctor, you might not be able to cover the monthly due amount. Soon after you graduate, you can only earn an entry-level salary. This little salary will have to cover your rent, transportation and other necessities. When all that is paid off, there might not be enough left to pay back your creditors. Then you might fall behind on your payments, and sink deeper into debt. It’s a vicious cycle.
So, What Should I Do?
You can always wait until America makes college education free. In case that day might never come, you should consider reducing the overall amount you have to borrow by applying for scholarships and grants. Also, borrow money from family, which will not incur interest. Then, borrow only the amount that you absolutely need.
The fact is that it’s difficult to succeed in life without a college education. And the majority cannot get a college education without taking out student loans. It may seem unfair, but if you enter into loan agreements with a clear set of goals, it might not be impossible to pay off your student loans.