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While unsustainable consumer debt has helped bring the American economy to its knees, little attention has been given to the growing amount owed by college students. A June statistics released by the Federal Reserve Bank has underlined the amount of student debt. The total amount of student loans nationally- $830 Billion – now exceeds that of credit cards - $827 Billion. (See the Wall Street Journal Blog http://blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards )
This generation of college students enters the workforce with a debt burden that will take years to repay. And unlike credit card debt, student loans typically are not eliminated through bankruptcy.
The long term consequences for college graduates (and those that do not finish college) are significant: less disposable income after starting work, more stress and pressure due to large debts and more difficulty in making large purchases such as homes. Reducing student debt would have a beneficial effect on the housing market as young educated couples would be better credit risks for new homes.
What, however, can be done? Keeping public colleges open and affordable is a key step. States need to pay attention to their public college systems which provide excellent education at a reasonable cost to students. In this light, the recent reductions to public colleges and universities by State Legislatures and Governors is troubling, compounding financial pressure on students. To reserve these trends, students need to become politically active in defending their interests: a chance for a college education at an affordable price.
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