Student Loan / AP

College is expensive. Tuition increases each year. For decades, federal and state government programs have aimed to provide access to higher education. The primary tool is student loans. Today, the total amount of outstanding student loan debt is astronomical, and a growing number of people are having difficulty making their payments. Here is how student loan debt and default affects us all.

College Debt Levels Are Higher Than Ever

College tuition increases outpace inflation. In many cases, the cost increases are more than double that of the overall rise in costs of everyday items. A gallon of milk may cost two percent more over a year because of inflation, while tuition can spike four or five percent. Why? Colleges and universities say they have more significant expenses that other businesses, such as the need for expansion and research.

More People Are Defaulting On Their Student Loan Debt

When college is more expensive, students acquire more debt. More of these loans are now in default, which points to an unsustainable system. Students loans are given regardless of ability to repay. Some graduates who cannot find work enroll in graduate programs that end up adding to their final bill. Right now, there is $1.4 trillion in student loan debt in the United States.

Default Rates Are Higher For Those Who Attended For-Profit College

Interestingly, those who attend for-profit colleges, seem to be at a higher risk of defaulting. In a study comparing graduates from 1996 to graduates in 2004, the latter group was found to have a default rate of nearly four out of ten, and increase from only one out of ten. There are more for-profit colleges now than before, and the research points to a system that sets up unreasonable post-graduation income expectations.

High Debt Figures Can Be Good In Some Circumstances, But Not With Student Loan Debt

Most personal debt—about 70%—is housing related. The next largest debt category is not credit cards, but student loans at about 10%. Debt is not always a bad thing. If it helps secure financial futures, like the typical promise of a college education, then it can be a good thing. Reality paints a different picture. Student loan debt may be putting our younger generations in a hole which they cannot easily escape.

The Entire Foundation Of The Value Of College Education May Be Shaky

We all are raised to believe that education is important. Many people question, however, whether a college degree teaches real-life job skills. So, while being well-read and well-rounded may be personally enriching, the connection with employability may be less established. In a self-defeating cycle, young people go to college to obtain a degree which is supposed to help them find a job only to find that they graduate unprepared and debt-laden. Some believe a solution may lie in redefining education by elevating the status of vocational learning.