We have a $1.6 trillion problem in our country right now: student debt. What’s worse, how much do students — and parents — even know about student loans?
I will end up with a lot less debt than many. That’s because I've seen what it can do to other people. Growing up with two older siblings, who very quickly learned the horrors of student debt, made me proactive in avoiding it. My sister worked all through college and had a full scholarship, yet it took her eight years to pay off her $20k debt from student loans; my brother had it worse.
I tried to fast-track my degree to graduate a year early just to avoid some of this debt.
However, I still took out student loans because, at the end of the day, I needed them. Right now I am roughly $12,000 in debt, which is on the low end. While my strategy has helped me, it isn’t practical for everyone.
Despite knowing the impact student loans could have on my life, I still didn’t understand them. I didn’t even think about my loans until a friend asked me one day, “Who are your loans with?” Why should I care? Well, that's an issue. Most don’t know who they’re borrowing from. So, if anything changes in the policies with the lender, or if there’s been a mistake, they won’t know.
Too many people blindly borrow and give away their money.
The average student debt in North Carolina for a bachelor’s degree in 2019 is $26,526, according to the Center for Responsible Lending. Furthering education and earning a masters, Ph.D., or going to private colleges is going to make that number even higher.
The sad part is, that number only accounts for graduates. Many go to college, don’t finish andstill have ridiculous debt.
Accumulating interest is another large piece of this crisis. Many students don’t think their loans draw interest as long as they are in school, but that’s only true for subsidized loans. Unsubsidized loans begin incurring interest as soon as they’re accepted. While in school, students could owe hundreds more than the original amount because of interest. I’ve heard numerous stories of individuals paying off loans for years and still owing the same amount they started with because they can’t keep up with the interest.
It’s a given that everyone wants less debt, but the lack of knowledge prevents people from making smart financial decisions. These explanations need to be implemented at the high school level in the curriculum, from counselors, maybe a class taught about it too. We also need more transparency from loan lenders and colleges about what taking on student loans really looks like.
Emilee Phillips is a fourth-year studying communication.