By RACHEL BUCCHINO Capital News Service
Student loan debt has reached an all-time high of $1.48 trillion as of June 2019, and is expected to increase, according to the Federal Reserve Bank of New York.
Roughly 81% of this debt is composed of federal direct loans, as reported by Federal Student Aid (FSA), an office of the U.S. Department of Education.
There are two main components of student loan debt — federal loans and private loans. Federal loans are lent by the government; whereas, private loans are lent by banks and other private financial institutions. Private loans tend to have high, variable interest rates.
Federal loans have low, fixed interest rates and are usually based off of financial need or credit scores. Currently, the undergraduate interest rate for both direct subsidized and unsubsidized loans is set at 5.05%. This rate increased by 13.48% in just one year, according to FSA.
"The latest student loan debt statistics for 2019 show how serious the student loan debt crisis has become for borrowers across all demographics and age groups," Zack Friedman, entrepreneur and bestselling author of The Lemonade Life, wrote in an article published by Forbes.
Friedman also stated that student loan debt is now "the second highest consumer debt category" in the U.S.
Some students, however, feel that there is a general lack of knowledge about the impact that student loans can have on post-graduation life.
"Thankfully, I had the guidance of my mother, who calculated what my loans would be for each of the schools I (was) accepted to. She made the facts about student loans incredibly clear - facts I previously turned a blind eye to, thinking that finances and scholarships would just work out," Nichola Merkel, a senior at the University of Maryland, College Park (UMD), said. "Without her, I probably would have ended up at an out-of-state school, ignorant to the debt that awaited my upon graduation."
Merkel, along with other students at UMD, agreed that without the guidance from parents or older siblings they, too, would turn a "blind eye" to the debt acquired from taking out a loan.
"I was fortunate enough to have an older brother who went through the entire student loan process so my family was able to assist me with what sorts of loans would have the lowest interest and would be easiest to take out and pay off," Kathryn Ozeroff, a junior at UMD, said.
With or without family guidance, the balance of federal student loan debt is still high in comparison to previous years.
The balance of all federal loans in the U.S. and Puerto Rico is $1.36 trillion as of June 2019, reported in the Federal Student Loan Portfolio published by FSA. California, Texas, Florida, New York, Georgia, Pennsylvania, Ohio, Illinois, Michigan, North Carolina, Virginia, New Jersey, Maryland, Massachusetts and Tennessee are the top 15 states with the highest federal loan balance. These states alone comprise 66% of the total balance.
Colleges within each state offer different federal loan packages for their students.
In Maryland, Johns Hopkins University has the highest reported tuition and fees but has the lowest average federal loan amount per undergraduate student from 2017 to 2018 at $5,035. Washington College is next with an average amount of $6,206, according to the National Center for Education Statistics (NCES).
"I didn't do any research prior to applying for a loan. I had a lot of support from my parents and they helped me through the process," Molly Briguglio, a senior at UMD, said. "Even now, I am still very unaware of what the entire federal loan process entails. When applying to these loans, I went in with a very indifferent attitude because it is so common these days to have loans, and nearly every college student I talk to has some form of a federal loan."
NCES reported that UMD gave an average amount of $6,395 to each of its undergraduate students from 2017 to 2018.
Strayer University has one of the lowest tuition rates in Maryland but has the highest average federal loan amount at $11,238.
Briguglio and Ozeroff, along with about 787,700 borrowers in Maryland, have at least some form of federal student loan debt.
"I try to look on the bright side of things and figure, if I'm having to take out these loans to learn, I should then be more motivated and successful and ideally have a job that enables me to pay off my loans quickly," Ozeroff said. "When I think about it that way, it acts as more of a motivator than weight."
Almost half of those borrowers have at most $20,000 in debt and about 21% have anywhere from $20,000 to $40,000 in federal student loans.
About 10% of borrowers have at least $100,000 in debt.
Despite having debt, students from UMD say that they hope to get a well-paying entry level position to be able to start making monthly loan payments.
"I am constantly thinking about getting a job in order to start saving up money for when I graduate," Briguglio said.
Other articles from Hispanic Outlook:
Diversify Or Decline
Most people believe diversity in our society is a worthy goal. It seems a particularly sensible one for a nation established and built by individuals from a wide variety of backgrounds. But how to achieve and sustain it?...A bit of history. For centuries the privileged class took steps to ensure their success and those of their male offspring. The well-established old boy network was in many ways an efficient system that worked for those who ran it, primarily WASPS (White Anglo-Saxon Protestants). Admission to college, employment offers and promotion opportunities were heavily influenced by who you knew, who recommend you. But the well-oiled network had fatal flaws. It was insular, extremely restrictive and self-serving. It was great for those connected males, and in the past, males were the preferred gender for sure. But what about everybody else? Vast numbers of under-served ethnic, religious or national groups didn’t have a chance. The playing field was painfully uneven. The cards were stacked against hundreds of thousands of Americans if not millions be it for education or employment opportunities. Finally, in the 1960s affirmative action was…
Judging Good-Looking Employees As Bad
(AP)(THE CONVERSATION) Beautiful people tend to have a lot more luck in the work world. Research has shown people deemed attractive get paid more, receive better job evaluations and are generally more employable. It’s even been shown that good-looking CEOs bring better stock returns for their companies. In part, this may be because companies believe consumers are more likely to buy things from beautiful employees, which is perhaps why retailers like Abercrombie & Fitch have used looks as criteria in their hiring process. Abercrombie says it stopped doing that in 2015. There’s some evidence, however, that this worker “beauty premium” may be wearing off – at least when it comes to employees who interact with consumers. In television commercials, for example, retailers and other companies are increasingly using real people – with all their physical flaws – rather than photoshopped models to give their brands an “authentic” feel. Research several colleagues and I conducted recently suggests that companies may be wise to...
New Grads Reveal A Confidence Gender Gap
For perhaps the first and only time in a person’s professional life where they are competing in a somewhat level playing field is as a freshly minted college graduate. If your grades are comparable and you are competing in the same field as your fellow graduate, you should be just as confident about landing a coveted job as he or she might be. But a study of recent college graduates reveals that this is not necessarily so. You point of view, it turns out, is very much affected by what gender you are. The survey, conducted as part of the Cengage Student Opportunity Index, shows that while recent college graduates feel good about their job prospects, women are much less confident than men when it comes to salary expectations. Women are also significantly less optimistic than men about the country’s economic outlook, with a majority reporting they feel the country is on the wrong track. And these concerns are not unreasonable. The fact that we are a society that is ideologically divided over the question of equal pay for equal work and statistics that…
2 Physicians Personalize Vaccine Debate
In the year 2000, the national vaccination rate was 90% to 95%. Measles was declared officially eliminated in this country. However, since that time an anti-vaccine movement has sprung up internationally, which has lowered the percentage of children vaccinated at levels that are alarming the medical community. Earlier this year, there was a surge of measles cases in Washington State. The vaccination rate across Clark County, Wash. was 78%, but some schools in the area have had rates under 40%, according to the Clark County Public Health website. Washington State legislators introduced bills to deny parents refusing to vaccinate their children for personal and philosophical reasons. Washington was one of only 17 states that allowed for that exemption. The bills, supporters explained, was to prevent a full-blown epidemic in the Pacific Northwest. After a contentious debate and hearings, the bills were passed and signed into law by Governor Jay Inslee. What follows are the views of two Physicians who have been personally touched by...
Using Crowdsourcing To Diagnose Patients
It’s no surprise that the internet has changed the practice of Medicine. TeleMedicine is now being recognized by major insurance carriers and medical facilities as a viable option for Patients. Physicians routinely consult and exchange files on line. Patients can access their medical files and history through laboratory and hospital websites. But now crowdsourcing has taken Medicine to a whole new level. A new series on Netflix explores how Physicians can harness the power of the internet to better treat their Patients and provide a window into the entire diagnosis process. The series, “Diagnosis,” explores the life-changing impact of receiving a diagnosis for individuals who’ve been searching for answers, and the healing that comes with connecting with others who can empathize with their experiences. Based on Dr. Lisa Sanders’ column in The New York Times Magazine, “Diagnosis” follows various Patients on their respective journeys toward finding a diagnosis, and potentially a cure, for their mysterious illnesses. By combining the power of…
Place your job ad in our classified page on the HO print & digital Edition
