Did you know…
College costs rise annually causing students to borrow more loans. More and more students are graduating from college with student loan debt. Forbes reported that “student loan debt is now the second highest consumer debt category—behind only mortgage debt.”
“The percentage of borrowers who owe $50,000 or more has tripled”, says CNBC.
Loan debt makes it difficult to buy a home, a new car, start a family, or save for emergencies.
Parents with Additional Debt
Parents are burdened by parent loan debt or withdrew from retirement savings to pay for their child’s college costs that only delays their retirement.
CNBC mentioned that “the average parent borrows $21,000 in student loans for their children’s education… The debt comes as these parents are approaching retirement and it is on top of the loans students take out to pay for their own education.”
Government Reducing Aid
Annually, the government cuts funding appropriated for education, so less students qualify for grants. Instead students are borrowing more student loans to cover the costs. Student loans with the interest subsidized by the government are being phased out. This means that there will soon be no interest-free loans for students. The interest rate is market-based or based on the economy. Currently, the interest rate for the undergraduate Direct Loan is 4.45%, which is higher than the mortgage interest rate.
In addition, the current administration wants to cut the Public Service Loan Forgiveness program. This means that people who work in public service won’t be able to have some of their student loans canceled.
A Debt-Free Way to Pay for College
Did you know there’s a better way? You don’t have to borrow loans to pay for college. Parents don’t have to borrow loans or withdraw from their retirement account to pay for college.
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