We talk a lot about educating the American people about Student Loan Forgiveness Programs because there are over 33 million public service workers who may qualify to have their student loans forgiven. We talk about it because loan servicers aren’t.
Navient only has 15% of its borrowers enrolled into the Income Based Repayment Program, meaning that only 140,000 borrowers out of the 900,000 that work with Navient and are eligible are actually enrolled. It’s not just teachers that are eligible, like many people still believe. Health care employees, firefighters, police officers, members of the United States Armed Forces all qualify, and more public sector jobs are being created every day. We talk about it because not enough people are. In the meantime, our national debt continues to rise. Every second our country’s student loan debt increases by $3055 dollars. The big question is what does more debt mean for our country?
1. More debt means fewer college graduates
Since last year the number of students who enrolled in colleges and universities . Since 2011, college enrollment has declined by around 1 million students. With over 70% of college grads leaving school with student loan debt, more and more Americans today are looking at college as a burden instead of a tool to foster success. Going straight from school to the real world and the job market with a heavy debt has left grads feeling disadvantaged and reduced the ability of America’s higher education system to be a force of upward mobility. Add that to the fact that the poverty rates for those with only a high school degree is 22% compared to 6% of those with a college education. If less Americans are getting their degrees, we can only expect that rate to increase.
2. More debt means less money
According to recent studies, college grads aged 25 to 32 earn $17,500 more annually than those with only a high school education and over a lifetime, earn $1 million more than the latter. Until now. According to the Congressional Budget Office, average income will grow more slowly over the next 25 years if student loan debt continues on an upward path. In today’s job market we are seeing more and more college grads ending up in low-wage and part-time positions. The $1.3 trillion in national student loan debt has sent the country into a downward spiral.
The U.S. economy lost 9 million jobs from 2008 through the beginning of 2010, the majority coming from the high-paying sectors. Because it’s become harder to find education-level appropriate jobs, the recession has forced unemployed American workers with more experience to take lower positions they are overqualified for and would have gone to new grads in the past. In the last 8 years, the total outstanding educational debt of our country tripled, rising an average of 14% each year. What does that mean? It means that because of our national debt, 44% of those ages 22 to 27, who have at least a 4-year degree, are working in jobs that don’t require that level of education.
3. More debt means fewer jobs
According to the Bureau of Labor Statistics, "the number of full-time jobs last month was still 2.3 million below where it was back at its peak in 2007.” Sectors like technology, manufacturing and construction are getting hit the hardest with low-wage and part-time jobs replaying high-wage full-time jobs. More student loan debt has shown a decrease in the amount of young entrepreneurs and less new businesses popping up.
4. More debt means fewer families
An obvious effect of student debt can be seen by looking at how many Americans are postponing marriage, buying homes and having children. Studies show that it takes $50,000 a year to support a middle class lifestyle for a family of four in the U.S. today. 71 percent of all workers make less than $50,000 a year. In fact, 51 percent of all workers in the United States make less than $30,000 a year.
According to the college board, the average cost of tuition for 2014-2015 was $31,231 at private colleges and $22,958 for public universities. This makes it impossible for a middle class family to send their children to college without taking out massive loans and passing the burden of student loan debt on to the next generation.
Okay big picture. We have older more experienced college-grads working entry-level jobs. Almost half of young college-grads working jobs that they don't even need a degree to do. The average borrower leaving school with $29,000 in student loan debt. We have lost over 2.3 million jobs since 2007 and the positions being created today pay 23% less than the jobs that have disappeared. With less money and more debt, 7 million out of 40 million cannot make loan payments at all and are in default. But there are 33 million Americans that could be eligible for public service loan forgiveness. This means all of their remaining loans will be forgiven after 10 years of repayment.
Can you imagine the positive ramifications that would have on America’s economy? Spread the word! Student Debt USA is here to help guide borrowers through the process of student loan forgiveness programs!