Friday, March 29, 2024

The Top 5 Student Loan Issues Every College Grad Can Agree On

*Federal student loan debt has crossed $1.5 trillion mark, while student loans from private sources currently stand at another $119 billion. Students in the US have it pretty rough, right?

Imagine the plight of an African-American student.

Studies reveal that black students accrue 85% more of this debt than their white friends. Given their lower socio economic status on average and the hurdles bred by the inequalities inherent in the system, this disparity multiplies by almost 7% every year. The student loan crisis may affect black and white students differently, but certain issues such as lack of flexible payment options or misinformation are common for all students taking loans. Below are 5 student loan issues every college grad can agree on.

1.     Switching Your Repayment Plan Is a Hassle

A standard repayment plan means that there will be equal payments spread across a period of 10 years. However, if someone wants to change the terms of the repayment, they will have to go through quite a lot of problems.

2.     Student Debt Will Follow You

There is no escaping this reality—all students will agree to this one. Escaping student loan is almost impossible now as your lenders will follow you for payments even if you’ve declared bankruptcy. Up until 1998, there were ways in which you wouldn’t have to pay the remaining loan if you declare bankruptcy, but the laws have been made more stringent ever since.

On average, a black student has it tougher than his white counterparts as he does not have the parent’s wealth to fall back on.

black female student graduating (unsplash)

3.      Loans Are Incredibly Confusing

There’s tons of misinformation surrounding student loans in the United States. Additionally, technical and complex jargon is overused excessively in student loan agreements which ends up confusing the students and makes it difficult for them to choose the right payment plan.

4.     Private Universities Have become Profit-Centric

Most students agree that private universities see students as consumers and not as scholars. Black students are affected the most by these money making institutes as they enroll in these profit-centric institutions in large numbers. To help put things in perspective, half of all black doctoral students attended private universities in 2015-16.

5.     Student Loan Repayments Add To Financial Stress

Most student loan borrowers resent the looming loan repayments that are due every month. This is especially the case in the year right after graduation when most students have no stable stream of income.

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