There is a current trend in our country to be all that you can be. As children we are told to dream big, to think about whatever career path that would fulfill us and thrill us throughout or lifetime. A life of happy work is more important than the practicality of making ends meet in the day today. Along with this mentality, many young people who would have otherwise not qualified for the college seen have been pushed on towards post-secondary education. Now what we have is many more college goers, fewer college completers, and a ballooning student debt bubble that could suck the life out of the borrower and the lender when it finally decides to rupture.
How Big Is The Student Debt Bubble?
The rapidly growing student debt bubble has recently approached 900 billion dollars, which is up 70% since 2007. The average debt held by individuals for student loans is also up 33% to $24,000. In all probability, as the economy has worsened, more people are going back to school for a second chance at a career path, and fewer parents and students have money set aside to cover their education.
Student Debt Is Worsening As Loans Are Going Sour
Unfortunately, those just graduating from college also have one of the worst employment prospects in today’s economy. Unemployment is in the upper teens for new college graduates. As a result, 51% of the loans have either been deferred or are in forbearance. 33% are 90 days past due, which is up 24% since 2007. Repaying student debt is even more difficult for those who started a college education but did not manage to complete the course. They are left holding the bag for the student debt, with no college level job to help pay for it and unlike other loans, there is no “bankruptcy” on student loans. Whether or not you can pay them, they stay with you for your lifetime until you are able to pay them back.
Student Debt Load Is Hurting The Economy
The economy relies on the young adult age group for many important aspects. It used to be that newly married young couples and those just beginning their career path would be the ones to buy the starter homes, which spurs on the housing market. Their inability to purchase a home has significantly slowed the growth in that area. Paying back student loans can take as much as $500-$1000 out of a young person’s paycheck each month, which also dramatically decreases their ability to buy goods or services that also stimulate the economy.
Protect Your Family From Your Student Debt With a Life Insurance Policy
If you’ve “fallen victim” to the pressure and overload of student debt, then in many ways you are more in need of financial planning than other individuals. Somehow you need to find the balance between paying down debt, managing the budget, and still set aside money for future savings. Additionally, those with significant student debt, may want to consider a life insurance policy, to protect their family and loved ones from harm in the event something happened, you were met with an unfortunate death, and your family is left with your debt and a negative estate. For more information on how to manage your finances with student debt, and info on protecting your family from your debt through a life insurance policy, speak to a Redhawk Advisor near you today.