Student loans and student debt are hot buzz terms in the economic world. The statistics reflecting the fading American dream prompt several experts to question a once indisputably constant in American society: the value of higher education. If we take an honest look at the cost of higher education, let us begin to question: Is this generation of rising professionals really getting what they pay for?
For the first time in American history, student loan debt has surmounted credit card debt, reaching $1 trillion dollars. In 2010, students took out $100 billion in federal loans. Starting July 1, the interest rate on federally subsidized Stafford student loans will automatically double from 3.4 percent to 6.8 percent, which could cost between $3 and $7 billion per year. Over the last ten years, the average inflation-adjusted tuition at public four-year colleges rose by 29% and 22% at private colleges, both higher than the rates of inflation!
According to a study recently released by Young Invincibles, two-thirds using federal loans to pay for higher education are unclear on the student loan process. About 20 percent, with an average of $76,000 in student debt, were surprised by the amount of their monthly payments.
In American society, opting out of college screams such foolishness and disaster that students take out loans on the basic principle that it will pay back eventually, unaware of how deep in debt they may become or their chances at creating a financially secure future.
The numbers do not lie: higher education is a life sentence. The question can then be raised: What is it that is so valuable that it costs an entire lifetime to repay?
We found that more disturbing than the numbers describing student debt were the numbers describing employment among college graduates, or lack thereof, rather. A shocking 53% of recent college graduates are jobless or unemployed.
Put simply, the average student pays $76,000 for the odds of finding stable employment NOT in their favor. The once conventional path to success is officially closed for construction. A handful of students will find employment or need higher education to pursue careers in specific fields, but we are in an age when the average prospecting student should think carefully before following in suit.
ABC News writer Adam Levin summed up the situation perfectly with:
“Many (or most?) of the citizens who take that loan money really don’t understand what they’re getting into, and many of them (if we are honest about future potential earnings) shouldn’t be dreaming that dream in the first place.”
Fortunately, the UnFranchise® business provided a solution to the bleak situation for students more than twenty years ago. From the early days, UnFranchise® Owners took the road less traveled, with fewer checkpoints and barely a road map. More than twenty years later, we have the experience of success at our backs and a wide open future before us.
If you are like the thousands of entrepreneurs across the globe that crave a better way of turning dreams into reality, you are on the right side of history. Though we cannot promise overnight success, we can provide you the tools to equip you to build your business and put you in charge. If you’re facing student debt, now is the time to work towards becoming financially free.