While a debt crisis is felt nationwide, many college students are vulnerable to significant and unmanageable debt. In addition to college loans, students in Tennessee and nationwide are also confronted with medical expenses and credit card debts compounded by the fact that many cannot get a job to make ends meet.
According to education experts, the more than $1 trillion of student loan debts has created a serious economic problem, especially for those who don’t have a degree to show for it. Nearly 30% of college students who take out loans drop out before they earn a degree. Those drop outs are also four times more likely to default on their loans than graduates.
In the past, public policy focused on increasing access to higher learning, without considering the costs. Now experts are questioning whether the path to college should be taken if the student does not have a clear plan on how to repay loans or whether they are committed to obtaining a degree.
Students with the economic burden of debt without the benefit of higher income and employment can be a disaster. In addition to the tanking economy and minimal job prospects after graduation, many students are forced to choose between the degree and the burden of paying for it. For many, balancing college with a full or part-time job just isn’t enough. Also, feeling torn or ambivalent towards college can ultimately result in dropping out.
While student loans cannot be discharged through bankruptcy, many drop-outs have also amassed credit card and medical debts. Chapter 7 or Chapter 13 bankruptcy is available to help drop-outs get control of finances and help pave the way towards and independent financial future.
Source: The Washington Post, “College dropouts are drowning in debt,” Suzy Khimm, May 29, 2012.