Friday, May 18, 2012

Student Loan Debt Bomb

I have been hearing so much about student loans lately and all the negative aspects of a weak job market. I have a ton of student loans and I must admit I am super nervous about my repayment options. Right now I could not afford to repay what I actually owe. I was hoping to obtain a great job that pays more money than I currently make. Of course this is merely a hope and not quite based in the real reality of the current job market. I had my first interview for an entry level position in my field of Finance, I never heard back. I thought it was a bit rude, but I was told this was the new normal in job searching. Companies are not even bothering with the………..thanks but no thanks type of deal. Well many students are facing this every day. They spent a ton of money getting that fancy pants degree and now it seems to be just a piece of paper hanging in a nice frame next to your high school graduation photo on your mama’s wall. Many finance experts say the next financial explosion will come from the massive amount of student debt that has been financed by the government. Many predict that if the job market does not improve that the government will see a massive amount of student loan defaults. It will not be very long before the government has provided 1 trillion dollars in student loans. Experts say this default could be worse than the housing bubble. But what are students suppose to do. I was listening to NPR and they asked the question “Why so many people with PHD’s are on food stamps?”
My guess is the same reason Lakeysia down the block is on food stamps………….THEY ARE BROKE and still need to eat. Now mainstream media want to focus on poverty and debt, when it was a minority issue it was not a problem. But guess what…………bad credit, payday loans, cash for gold, disconnection notices, EBT cards, unemployment checks and Medicaid has shown up on the white side of town. Now it is an official got-damn problem. Actually one guy blamed poor folks for this dilemma, he stated that poor people have started getting degrees in massive numbers and that is the reason for tall the student loan debt. While that may be true, poor people were lead to believe if they got an education it would be worth the investment to get the loans. But we did not anticipate being in a recession for years. Currently student loans have to be repaid… if not there are consequences and repercussions. The government can garnish your wages, put a lien on your home, take your income tax check, and ruin your credit. I do believe this will be a situation that the American people will have to deal with at some point.