In a world where everything is becoming more expensive, a college education is no exception. Every year the cost of attending college rises and more and more students find themselves struggling to pay for their schooling. That has students and parents all over the country in an uproar over the rising costs of colleges and universities. In the case of public institutions, this happens because the government is cutting back on how much money they give to colleges.
Due to college being so expensive, but so necessary in today’s world, Private Student Loans are on the rise. In many cases, the top colleges in the country are finding themselves overwhelmed with the amount of money it takes to pay for teaching each student. Like any other educator, college professors are getting tired of having to spend their own money to fund their teaching efforts because the schools simply can’t give every teacher the money they need for classroom resources, computer equipment, etc.
The rising cost of college tuition has led college students all across the country to protest. For more than a century now, tuition rates have been rising. By the 1980s, tuition was becoming a burden on the income of middle class families in this country; forcing many to turn to more costly Private Education Loans.
Educational Private Loans are becoming the only way some students can afford to attend college and receive the education that they so desperately need to make it in today’s world. Until something is done to control the ever-rising costs of tuition, families will have to turn to these loans to achieve seeing their sons and daughters off to college.
In a world where a good education is not only becoming increasingly important, but increasingly expensive as well, many students are applying for loans to help them pay for their education.
Unfortunately, many students will later default on loans because they simply can’t afford to pay them back. This had led to the U.S. Department of Education releasing a federal student loan default rate that covers a period of three years versus the normal two year period. This is the first time the Department of Education has made this sort of change to alleviate the growing issue of student loan default.
Within two years after graduating from college, a student attempting to pay back a loan often defaults on it at a rate of 9.1%. By the time they have been out of school for three years, many of them end up in default at a rate of 13.4%.
Public colleges have reported that students default on their loans at a rate of 11% and private colleges have reported that their students default on their loans at a 7.5% rate.
Experts speculate that if the percentage of people who are unemployed goes down the default rates will go down also. They feel that the combination of unemployment levels and a stagnant economy are the two things that are running the default rates so high.
For-profit schools have begun to offer debt counseling to their students, and this is helping to cut down slightly on default rates. Schools will continue to fight their rising default rates.