College Students, Loans and Forgiveness
Is this more evidence of the entitlement society our young adults feel they are, shall we say, entitled to? Or is this more evidence of our young adults just not knowing much?
The New York Post is reporting about a survey of 500 college students performed by a private company called LendEDU that approximately 50% of current college students believing that their student loans will be forgiven by the Federal government.
The US Department of Education states that federal direct student loans can only be forgiven for the following reasons:
- If they enter public service jobs for a specified period of time
- Agree to teach in an underserved area
- Die or become permanently disabled
- Or if the school they attended shuts down while they are enrolled or within 120 days after they leave.
We are told by the U.S. Department of Education that only about 10% of all college graduates will ever see any portion of their student loans forgiven under our current loan forgiveness law.
Why do so many college students believe that their loans will be or should be forgiven? Has the last 8 years of pushing the entitlement culture harmed these young adults in believing that many things in life, especially those given out by our Federal government is free to them.
As the Secretary of the Department of Education, Betsey DeVos said “there is no such thing as a free lunch”.
The answer to the above question is not as important as determining why they believe that there is something such as a free lunch. We as a society are not only harming these young adults by instilling the thought of things in life being free but we are harming society as a whole.
Another question is why does higher education cost so much?
Did you know that Student loan debt is continuing to rise annually in the United States? According to the Federal Reserve Bank of New York approximately 44 million Americans hold $1.31 trillion in student loan debt. To put this into perspective you should know the following facts:
- Americans hold approximately $779 billion in outstanding credit card balances.
- United States students owe approximately the same amount as the entire economy of Russia, where the nominal gross-domestic product is $1.33 trillion annually.
- Americans college students and graduates collectively owe on student loans more than the annual gross domestic products of the Netherlands, Greece and Chile combined.
The financial aid director at Pace University states that the annual tuition at his University is $42,354 for the 2017-18 academic year. He then goes on to explain that the total cost does not include about 50% of that cost is “discounted” through a combination of gift scholarships and other freebies like Pell Grants. This proves a point I have been making that the cost of higher education consistently increases when more “free” money is available to the students.
We need to get a handle on the cost of higher education and we need to also teach these young adults that there is no such thing as a “free lunch”.
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