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.
If you are planning to take up your higher education and are trying to decide whether to attend an American University or a European one, this article should help. First and foremost, let’s start by saying that there are pros and cons in the education systems of both the continents.
Cost: Let’s talk about the cost of education first that makes a major part of the decision making process. The price of education when it comes to the US is notably high in comparison to its European counterparts. Though there is a hue and cry all across Europe to increase the cost of education for sustainability factors, it must be noted that the cost of education in the US would still be significantly higher, at least for some time. Going to the cheapest college in the US would still cost about a couple of thousand dollars, say about $26,000 to procure a BA degree wherein in the contrary, most of the education system in Europe is free or have minimal charges.
Set Up: Another notable difference is the set-up of the universities. Where most of the universities are known to have sprawling campuses, the European universities are known to be scattered all across an area. For example, the University of Barcelona doesn’t have any central campus. From an organizational standpoint, the European Universities seem pretty weak with no sports teams, no university level representations in other activities, etc.
Instruction Methodology: Also, experiential learning is the focus in the US which makes the teacher to student ratio much smaller. On the contrary, education in Europe is more of a lecture-style platform, unlike the US wherein the professors are more of mentors. The discretionary powers given to the professors in the US are also wider than the ones given to their European counterparts. It is also a fact that the education undertaken in the US is recognized by more countries all across the globe than the recognition of the degrees earned in the Europe.
Quality of Education: When it comes to the quality of education, Europe ranks higher than the counterparts in the US. According to a recent survey that was conducted, research in science, mathematics and engineering was higher in Europe than in the US. If the figures are to be believed, the UK represents just 0.9% of the global population, it accounts for 3.2% of research expenditure, 4.1% of researchers, 9.5% of downloads and 15.9% of the world’s most highly-cited articles. These figures certainly have a story to tell.
So, just don’t attend a university abroad for the sake of the experience or to save money alone. It is important to weigh the pros and cons against your career goals and how you plan to leverage your education in your chosen career.
With the rate of both federal student loans and private student loans increasing, many are looking for another way to fund their education. For many, a debt free education is the ultimate goal. This is where income share agreements might work for students. Here, we will look at why income share agreements appear to be such a great option. We will also talk about what income share agreements offer, and political developments in the field.
The Real Issue
As mentioned above, the real issue here is the debt and loan repayment they face after college. Increasing tuition has meant that so many students have had to take out many federal student loans and private student loans. Even the government has noticed that this a real issue for students just out of college. The current economic situation and high unemployment rates have only worked to compound the problem. Because of this, students have looked for various options that can help them to lower the overall cost of education. They hope this can lower the cost of any future loan payments.
Why Income Share Agreements Offer a Real Solution
Income share agreements are a way to possibly provide debt free education. These agreements allow students to share stock in themselves. Investors simply invest in the students they believe to be the most promising. In return, these students agree to share a percentage of their income for a particular amount of time with these investors. In many cases, the cost to repay these sorts of investments would be much less than monthly loan payments for private student loans. In some cases, they could be even cheaper than payments for federal student loans. Income share agreements offer a real possible solution to the current student debt issue.
Recent Developments in this Field
Various companies, like Lumni, Pave, and Upstart are already offering students income share agreements. Recently, legislation has been introduced in the US to actually define exactly what these agreements constitute for students after college. It seems that these agreements can work for nearly anyone. It can also allow investors to fund the education of students with limited means and unlimited promise for the future. Finally, students can consider shopping for the best education, not just the best price, once again.