A new study from the Department of Education has found that one out of 14 recent college graduates have defaulted on their student loans. This is a 7% increase over the previous years. For more on this, read this Forbes article.
There can be several reasons why this happens.
[1] Students today are not capable or not interested in studying hard and completing graduation in the quickest time possible. They can’t find jobs on the quick and can’t start paying back the loans.
[2] In a depleted, recession-hit economy, graduates do not get jobs easily. They now end up as store assistants, cab drivers and pizza delivery boys. At best they get temp jobs.
[3] Students don’t want to work hard and don’t do courses that will fetch them well-paying jobs – account assistants, lab assistants, hospitalists …
[4] There is a decline in moral standards and students avoid paying back, thinking they’ll “manage” it when confronted.
Craig Brandon, a former teacher, puts out another reason in his blog Party Schools Exposed. Arguing eloquently, he says, “Student loan default is the final act in the great American college rip-off tragedy that begins with the “golden walk”… Students are constantly handed the loan forms that allow them to spend spring break in Cancun, through the graduation ceremony and finally into decades of poverty paying for a useless diploma.” Phew!
The bottomline is clear: Once you default, it is virtually impossible to repay the loan, it has a way of piling up and reaching the “impossible” level in no time at all. Interest rates get higher, penalties get thicker, and soon you face humiliation in the form of visits by collection agents. What kind of a life is that?
Brandon says many colleges today ruin students’ lives. I wouldn’t go that far, but there is basic truth in his arguments. If you choose not to study hard, choose to take college years as fun timepass, you will pay for it – with your future.
Don’t let college ruin your life. Enjoy your time there, but without forgetting what you are there for, without forgetting you have a huge ed loan that you need to pay back.
Do read Alan Michael Collinge’s book The Student Loan Scam. Enough to send you scurrying to your college text books, away from texting on the cellphone.
