College has been highly regarded for hundreds of years, people see it as the only path to real success, but in the last few decades, institutions have been charging more and more for tuition, and ultimately 98% of people cannot afford to pay for it themselves. The need for college loans created an enormous void, to which lenders happily jumped into, and started charging whatever they wanted. They knew that people were desperate to get a degree, because finding a job that was right for them depended on it, so they took on an amazing amount of debt to get that education that the entire education system told them that they needed since they were 5 years old. A few other problems occurred when taking on that amount of debt without a large income, people finished college with degrees in their field, but jobs were either scarce, or they simply didn’t pay enough for them to pay the loans and live. This created a very large number of people defaulting on their student loans.
These loans are in the trillions just in the US. The interest rates range anywhere from 4.5% for subsidized loans to 9.5% for other loans, which is the limit that President Obama set for loan companies. Lately, the national average for student loan interest has actually gone down, thanks to people standing up and speaking out against the greedy loan companies.
The average for student loans is about 6.8%, depending on what type of loan you get. The average tuition for a year of college at a university comes out to $34,740 for a private university. Four years of college will cost $138,960. With an interest rate of 6.8%, the price of the loan comes out to $148,409. Public colleges for state residents (this includes community college though) averages $9,970. The loan comes out to around $42,151.
Most students go a different route, and attend the best college they can get into, which is most likely going to be out-of-district, and the cost goes up significantly at $109,448 when it’s all said and done. That is a ridiculous amount of money for an 18 year old kid to take on as debt. Actually, the interest rate isn’t even that bad. You can get a lower interest rate with good credit, a co-signer, like having a parent sign on the loan, or just using a better, more honest company.
The problem is with the cost of tuition.