Know Your Student Loan Debt

With the U.S. student loan debt totaling over $1.2 trillion, more and more people are beginning to thoroughly analyze the issue and its causes. Today, the Guardian released an alarming report with numbers that suggest most incoming college freshmen have little to no idea what they are getting themselves into as they embark on their college experience.

The report points to one type of loan in particular as being the most troublesome. The federal loan, which constitutes an astounding $1.1 trillion of our nation’s total student loan debt.

In a recent study, the Guardian claims that “among students with federal loans, 28% reported having no federal debt and 14% said they didn’t have any student debt at all.”

You can read more of the article here:

“It is possible, even likely, that this lack of knowledge will cause students to be surprised when their financial circumstances become apparent, perhaps when their first loan payment comes due,” write Akers and Chingos. They say that students who find themselves in such circumstances express regret about their college education choices.

Guardian readers have previously expressed frustration with the lack of knowledge and advice they had regarding the financing of their college education.

“I wish my parents had pushed for me to go to a community college or had helped me weigh my options better. Instead I went to a private university and received a degree in the humanities. At 26, I have over $30,000 in student loans. I just got my first ‘real job’, where I have been able to start paying down my debt”, Shay, a reader from Montana, told the Guardian. “But does an 18-year-old really understand the concept of what $40,000 in debt is? I hardly think so.”

If a large portion of college freshmen have no idea what they are getting themselves into when they begin accepting federal loans to attend college, how can we expect them to be prepared to pay these debts off after graduation (if they graduate)? Federal student loans not only mislead young people, they inflate the price of a college education.

At the Campaign for Liberty Foundation we try to help deserving students get the financial assistance they need without putting them more in debt. We do this through the Ron Paul Scholarship program. You can learn more about this program here.