Whether or not it’s the guy who lives several rooms down on your floor or the girl who lives several houses away back home, chances are you know someone who has taken out loans to pay for their education.
Taking out student loans is not a rare occurrence; close to 12 million students borrow money to pay for their education, about 60 percent of students who attend college.
It’s no secret that the number of American students who attend college would significantly decrease if not for loans. However, while student loans work out excellently in the short term, they are subject to many issues in the long term.
Back in 2010, the amount of money owed for student debt surpassed the amount owed for credit card debt. In 2011, that amount surpassed $1 trillion.
So what do those 12 zeroes after that one mean? It’s a reflection of the downside that comes with the positive of working and studying for that degree. It’s a representation of the Morton’s fork that is modern-day higher education in America.
President Barack Obama recently launched a “Pay-as-You-Earn” program that allows borrowers to pay only 10 percent of their annual income in monthly payments, with the remaining balance of the loan being forgiven after 20 years. While that does sound ideal, the borrower will still have to pay taxes on the remaining balance
President Obama’s “Pay as You Earn” program may or may not be a perfect solution to the problem, but there is only one sure way to find out.
