With the pressure to stay competitive in the United States job market, many Americans will often do whatever it takes to obtain a college degree, even if it means racking up a heavy amount of debt in the form of student loans. Now, the total amount of student loan debt in the country is more than $1.3 trillion. Many Americans maintain student loans in excess of $100,000.
The issue has become so severe that lawmakers are starting to step in. Last September, the Obama administration took action by making changes to the Free Application For Federal Student Aid (FAFSA), which is the form filled out by college students seeking financial aid.
Then in December, the administration revealed the Revised Pay As You Earn (REPAYE) plan. This policy allows certain federal student loan borrowers to limit their total monthly student loan payments at 10% of their discretionary income.
Such measures have made the burden of student loans somewhat more manageable, but they won’t make the problem go away entirely. According to a recent study, Americans between the ages of 35 to 50 owe nearly as much money on their student loans as new graduates even after years of making payments. It has recently been discovered that student loan payments are even passing groceries as the largest monthly expense for many households.
According to leading student financial aid expert Mark Kantrowitz, more than 25% of people with student loans are graduating with excessive amounts of debt. Kantrowitz says that this extreme debt load has a major influence on how borrowers live their lives.
Kantrowitz wrote, “I also found that students who graduate with excessive debt are about 10% more likely to say that it caused delays in major life events, such a buying a home, getting married, or having children. They are also about 20% more likely to say that their debt influenced their employment plans, causing them to take a job outside their field, to work more than they desired, or to work more than one job.”
It is estimated that the total amount of student loan debt in the United States grows by more than $2,000 every second. While the government might be working hard to control the issue, this just might be a problem that is too big to contain.