As we grow up, everyone asks us what we want to be when we grow up. Once we get a little older, they ask where we want to go to college. They ask every question imaginable, except how we are going handle the financial responsibility. The decision to attend college quite often results in major student debt. This debt often influences a person’s decisions on where to attend college or if they are able to attend college.
With attending college there ensues a large financial burden, but it is difficult to find a job without a degree. The need for a college degree is growing, as is the cost. The unemployment rate representing people who have not graduated college is currently 7.3%. While that has decreased from where it has been previously, it is still higher than the unemployment rate of 5.9% for those who have graduated with an associate’s degree, and even higher than the 3.1% rate of those who have graduated with a bachelor’s degree or higher (Bureau of Labor Statistics).
The cost of college is intimidating and discourages many people from attending. There are more than 4,400 colleges in the United States of America with prices ranging from zero to more than $60,000 per year. The average cost of a public college for an in-state student in a four year program is $18,391. For an out of state student, the same program costs $31,701. A four year program at a private non-profit college averages at $40,917 (College Board 2013).
The price of college has risen over the years. In 2013-2014, the percentage in tuition and fee prices for out-of-state students increased 3.1%, slightly higher than state residents, at a four-year institution. The dollar gap between the two prices increased from $12,887 to $13,310 (College Board 2013).
Nearly 20 million Americans attend college each year. Out of those 20 million, 60% borrow annually to help cover costs. There are approximately 37 million student loan borrowers with outstanding student loans today. There is roughly between $902 billion and $1 trillion in total outstanding student loan debt in the United States (Synonym Classroom).
Most of the debt, $864 billion, is outstanding federal loan debt while the remaining $150 billion is in private student loan debt, loans that are not backed or made by the federal government. The average student loan balance for all age groups is $24,301. About one-quarter of borrowers owe more than $28,000, 10% of borrowers owe more than $54,000, 3% owe more than $100,000, and less than 1% owe more than $200,000. Private schools cost more on average, but they have more financial aid to provide to students (College Board 2013).
College students fill out the Free Application for Federal Student Aid (FAFSA), for the government to decide the amount of federal aid they will receive. Federal aid falls into three major categories, grants, loans, and work-study aid. Grants are mostly for undergraduate students and are ideal because the money does not...