For the first time, student loans have surpassed credit card debt to become the No. 1 source of debt held by Americans. With a combination of fewer college graduates getting jobs and unemployment at 8.7 percent, repaying student loans six months after graduation might be difficult for most.
That wouldn’t be much of a problem if it weren’t for the fact that higher education is a necessary ingredient for even a taste of a better life. In this case, being in debt for the next several years without a job is enough to leave a sour taste in anyone’s mouth.
Something, somewhere is missing. Rather, it wasn’t necessary in the past when graduating from high school was enough and tuition was cheap for those who attended college.
Nowadays, there is a break somewhere in the system — a missing link in the understanding of how loans affect the lives of those who have them.
Most importantly, there is a lapse in comprehension of how one can keep his or herself from going under while trying to get ahead.
All of us were given a version of the “follow your dreams” speech on high school graduation day. For the most part, it’s true — you can do whatever your heart wills you. But for most students, finances can play a much larger role than anticipated.
We all dream of the prestigious degree from the prestigious university, but in reality we must think about where we’re going and why we’re going there.
The branding and the possibilities offered must outweigh the onset of future debt, and if not, a balance between what one can afford with what a university can do must be reached.
Just as high school counselors are prompting students to take the ACT and SAT, sessions should be given to potential college students explaining what exactly they’re getting themselves into financially.
It seems simple, but explaining what debt specifically means and what harm it can do to your life and your future might not be. Some schools offer services where counselors sit down with families and walk them through the financial aid process, but even that might not be enough.
The right time for this kind of knowledge is high school, as a required class. The reasoning is that knowing about finances — debt, in particular — is something that every student needs to know.
High school prepares us for many things by requiring proficiency in areas such as math, reading, writing and certain scientific fields.
Judging from the growing amount of debt held by the public (about $9 trillion) financial education is something of which we sorely are in need.
It is good to know that universities like MSU have tools such as the cost calculator and employees to answer questions. Helpful though they might be, a more comprehensive look at essential finances is necessary.
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