No Loan, No College?
Tuition bills start to come due in the next few weeks, and there's more bad news for anyone in the market for a student loan. More banks have dropped out of the business because of the credit crunch, and those who are sticking with it are tightening standards. This Wall Street Journal story is particularly notable because it focuses on the students who need private loans to go to technical or trade schools. They're a significant part of the education world for lots of low-income students, but usually don't get as much attention as four-year or even two-year colleges.
Even before the credit crunch hit, our Squeeze Play study found more than half say college prices are rising faster than other expenses and six in 10 say many qualified students do not have the opportunity for a college education. Minority parents are significantly more concerned about college access. And our Life After High School survey shows how important post-secondary education can be, suggesting a real hit-or-miss career path for young people who don't get training beyond high school.
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This is a very real issue especially this fall. My college sent out a warning mid summer, alerting students of a new policy banning students with outstanding balances after the tuition due date from starting class. Federal loan rates nearly doubled--from 4.25% to 8%, and private loans from 6.25% to 10%.
When the employment market in the US continually pushes up standards, pushing low skill jobs out, and more professions require higher levels of education-- my generation is left with few options. So, the pressure is on, and debt at graduation (and consequentially decades to come) is only going to boom.
Hopefully this crisis lets up soon-- for those in debt, this will be disastrous for savings and investment, meaning it will be years before they can consider purchasing homes and developing assets. Further, if students "wait it out" or seek alternatives (technical schools), who will fill all those newly created positions which require higher levels of education? This generation will be paying for hard times in the finance market long into the future.
Lariss Jude
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