How much debt is too much?

It is rare that students pay for college out of pocket. It is almost laughable to think that it is even a possibility with the continual rise of college tuition. It comes as no surprise that 88 percent of students at Boise State are currently receiving some type of aid.

This means more then half of the students here will likely leave school with debt to pay off. Even with the help of
their degree, students face a challenge.

Almost any student can receive some kind of federal aid, whether it is grants or loans, thanks to the FAFSA.

The amount given to each student is based upon current need. What a student studies in school and how much they will earn when graduated is not figured to the mix. So, if a student winds up needing $50,000 throughout the course of his or her college career, despite the fact the student may only earn $30,000 or $40,000 a year once graduated, it is generously given to the student.

“Students are taking on too much debt,” Economics Professor Don Holley said.

Holley explained further it makes sense for students of more financially promising career paths, such as engineering or accounting, to borrow that $50,000 than it does for students studying a less financially promising degree, like English.

“You hear all these horror stories of these people borrowing $90,000 to get a Ph.D in English. With a Ph.D in English the best you can do is, for $60,000 a year, teach college,” Holley said. “An engineering student justifies borrowing $40,000. An English major shouldn’t borrow more than 10.”

But the student loan system allows this to happen because of how easy it is for students to get loans.

It is a common belief now that college is the way to go in order to get a high-paying job or satisfying career.

According to the Huffington Post, “unemployment rates for America’s young adults have spiked, but college graduates maintain an advantage. Seven percent of youth with bachelor’s degrees were unemployed this October, as opposed to 20.2 percent of high school graduates with no college experience.”

So, college has its advantages. It depends on whether or not a student really looks at what college and degree will be the best fit
for them; then if they really think of their financial game plan so they can manage any debt they take on.

Too much debt from student loans can cripple the financial situation of a graduate for years; for life basically, depending on the amount.

“If you declare bankruptcy you can get out from underneath an automobile loan or a house loan, but you can’t get out from underneath a student loan. That goes on forever,” Holley explained.

He also mentioned efforts are being made now that will allow students to declare bankruptcy on loans. Holley believes this possibility may make the federal government more careful about distributing loans.

As frightening as it sounds, perhaps complicating the selection and process of loan distribution is a solution to student loan debt. Of course, this solution is hard to accept. No one wants to be denied the possibility of attending college. But it is too expensive to afford out of pocket, and debt is often the wrong answer.

Depending on individual circumstances, loans may just make the cost more expensive due to interest. Something should be done to prevent students from accumulating too much debt than they can handle.

The alternative solution? Choose a cost-effective college. Know what job opportunities are available for each major of interest. Plan for the future. Being ahead of the game can save everyone time and money.

About the author  ⁄ morganackley

morganackley

Morgan has a never ending love for writing. Majoring in English Literature and minoring in Spanish Language, she hopes to one day publish a novel and interpret Spanish. Often she can be found daydreaming about traveling, mentally brainstorming ideas for her work-in-progress novel, and longboarding on chilly mornings.