Tran Harry – The Economy Needs A Fix

I have a good feeling that we will begin to see student loan delinquincies start to rise as the recession takes on a stronger hold of our economy.

The reasons why I believe student will have a hard time repaying their loans are:
1. Borrowing too much during prosperous times.
2. Poor job market with high unemployment after graduation.
3. Closing industries where many students studied and got their degrees.
4. Lower starting wages that don’t catch up with interest rates on loan.
5. New graduates lack necessary skills to compete in a tightened employment market.
6. It is difficult to get student loans discharged through bankruptcy.

I wouldn’t be surprised if student graduates start defaulting on their student loans. One big issue with student loans is that they are hard to discharge even during bankruptcy filing and therefore students will have to live with the cost of their educations for the rest of their lives until they can repay the entire balance in full. Many students will as a result end up ruining their credit records at an early age because they over extended their borrowing capabilities at a very young and uninformed age only to find out that 5 years into the future they won’t be getting the job or skill sets that they were promised to get them ready for a career and life of prosperous employment.

For anyone who is getting ready to enter college, take heed that college is a great tool which prepares you for a future career but by no means does it ever guarantee you a career because you have a college degree. Regardless of what counselors or college representatives may claim only a select few ever come out of college with a great job from the get go, having a college education is necessary but it in no way negates the fact that cold hard experiences are required to land you a fulfilling job where you want. Therefore, while I’m not trying to discourage anyone from attending college using these facts to base your decision making it is often wise to enter school without having to borrow to attend college. This may mean attending a school closer to your budget range, working part or full time during college to pay off the loan sooner before interest begins to accrue on the balance, not spending student loan money on inappropriate things that aren’t education related, don’t delay paying off your student loans and opting to use your wages on new cars or clothes while putting off student loan repayments assuming that you have time to pay those off after school is over.

In essence you must take the appropriate measures to ensure you leave college without taking on too much debt in your early lives, it is too early in your life to own a $100,000 debt.