Over half of the 20 million people who start college each year must take out loans to help cover the ongoing costs of higher education. While this means all new graduates with loans are likely to start their adult working lives struggling financially, the greatest impact is on the students who were statistically disadvantaged before they even stepped foot inside a college.
People who might find themselves struggling more with paying back high tuition costs include students from poor families, minority college students, female college students and students who are their families’ first generation to attend college.
Quite obviously, the majority of students with debt are from families who are unable to help pay their way. The average amount of debt for a student in the USA is nearly $30,000 after graduation. Students from poorer families who will not be able to help support them, coupled with the increasing lack of appropriate job opportunities after graduation means that poor students are going to be battling to repay their loan. This alone may mean the difference between choosing to go to college or not.
Minority students are more likely to take out loans compared to their peers and it is proven that as a minority, you will have less employment opportunities. Their ability to pay back the loan is clearly inhibited by these conditions. Also, out of all minority students who dropped out of College, most indicated that financial burden was the significant reason why.
Women are also affected in this way, while the costs of tuition are the same for women and men, gender wage differences are a very real occurrence in employment, with women earning as much as 23 percent less than men in the same job. Women earning less income directly affects how much they can put back into paying off their student loan.
Students who are the first in their families to attended college quickly find themselves in uncharted waters, without older family members to guide them through the processes and advise them on loans and financing. They may make financial decisions that are not to their best advantage, such as taking out private loans, not researching or knowing how to apply for grants and scholarships, or finding out the best accommodation or tuition options.
The USA’s student debt total has increased to over one trillion dollars and a large chunk of this debt is attributed to people who are statistically proven to earn less, and are less able to pay back their loan. It is time to start looking at how we can halt this piling on effect, and give the best start to students who have worked hard and earned their degree.