There is no doubt that the cost of a college degree is going up. Even those schools that have chosen to limit any increases still increased tuition and fees. Public colleges are up about 6.4% and private schools are up 5.9%. If you can’t manage the cost up front, through work and family and scholarship, the most common way of paying for a college education is through school loans. But it turns out in an economy where jobs are hard to come by paying back those loans is a big problem.
This year many new graduates are struggling to find any job at all, let alone a job in their field of study. So with greater unemployment or under employment many are just not paying those loans back. Student loan default rates are rising, the highest since 1998, and they are likely to get even higher. For those un or under employed students there is very little recourse. While there is an option to modify federal student loans private loans are just not negotiable. Senator Dick Durbin (D-IL) and Representative Danny Davis (D-IL) are looking at legislation that might help through bankruptcy but this is a last ditch effort for anyone.
There is no easy answer here. A college education is critical in a tight job market but how you get that education may be the important decision any student makes. Look to the community colleges and work study programs to help defray the costs of tuition and fees. Check out every possible scholarship – there are many small public and private organizations that offer small scholarships and every penny counts. Be sure to look at reputable web sites as you explore options. Focus on those federal funds and try to stay away from the private loans whenever possible. Make smart decisions before you enroll and you may find they pay off after graduation.