Being Responsible About Scary College Student Loans

How bad is the student loan situation in America? Here are two little statistics that should throw a little light on the matter: two out of three college student loans are in default; and then, the trillion dollars owed in college student loans in more than what is owed in credit card debt.

On average, a graduating student in America comes out with about $25,000 and student loans. That's about the average. Students going in into college, when they sign on the forms, think that this doesn't sound like a huge sum. They don't have much choice either there's less financial aid available now than ever before, now that governments across the country are bankrupt. And then, the job prospects that young graduates can look forward to, happen to not be that great. When fresh graduates can find paying jobs at all, they don't find that they pay very well. How exactly is this nation to help its students minimize student loan debt?

A lot of this trouble, experts in the matter say, comes about because people choose private college student loans over federal loans. Federal programs offer far better repayment options. There is a lot that can be said for consolidated loans. When you borrow $10,000 from one place, your minimum payment will be perhaps $150. When you borrow $5000 from two places, you could end up with two minimum payments, each being $100.

Long repayment terms can be a good thing. Young graduates don't typically earn much starting out these days. If they chose a short repayment period, they would probably not be able to afford those payments at the start their career. Typically, when fresh graduates find that they are unable to afford those payments, they just ignore them. And then those unpaid installments begin to pile up and they lose some of their options and rights. Being delinquent should not be an option. It can quickly overwhelm anyone.

There are so many college graduates out there who think that the standard repayment plan, involving paying everything back in 10 years, is the only option that's open to them. Everyone needs to know that reworking your loan is always possible. There are all kinds of plan options that you can pick, down the road. You can, for instance pick an income-based repayment plan.

The federal government needs to do a much better job educating young people in what happens when you let a loan slide. There are people today who took out $2000 student loans in the 70s and let it slide. Today, they are in retirement and they owe $25,000. They're having their Social Security checks garnished. The government needs to really do a better job educating young people about what happens when they don't repay their student loans properly.

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The Big Hike in University Fees Is Scary, Why Should UK Students Use the 'Daily News' For Guidance?

Increased Tuition Fees will bring 'mortgage-levels' of debt for our future graduates. This should encourage all Sixth Form Students to research their University courses with more vigour than ever before.

There are ways of organising student finance to minimise the effect of a lifetime of debt. Getting a job with graduate-levels of pay is the first step, especially with such high rates of unemployment around. Well, here is a big chunk of advice - Never believe what you read in the Papers, if you see a report about a desperate shortage in one skill area then check it out.

Recently, a serious shortage of Engineering graduates has been quite topical, with heavyweights of Industry and Politics crying out for a lot more students to become Engineers. After all the future growth of the country is at stake! So take a guess at the percentage of Engineers in graduate-level work, 6 months after leaving University - 90%, 95%? Well, according to the latest figures available it happens to be less than 50%!

So what. Why does it matter if our leaders spout yet another 'institutional truth', it happens all the time, so get over it. Well if you are a hard-working student at College, or Sixth Form, and you are considering what University degree to apply for, then it certainly DOES matter. As everyone knows, a good career boosts the quality of life. If a young student reads an article encouraging them to take up Engineering, then they may swallow the advice and do just that. Be very careful.

Let's just track the news articles involved. Firstly from some of the 'too few Engineers restricting economic growth' brigade:

UK Business Secretary of our Coalition Government, September 2010 "Business cannot grow due to a shortage of trained workers while our schools churn out young people regarded by employers as virtually unemployable. The pool of graduates is growing yet there is a chronic shortage of science graduates and especially advanced engineers."Chief Executive of Scottish Power, February 2011. "UK plans to develop renewable energy and improve power generation and transmission systems will be seriously affected by a shortage of engineers."Senior Executive of BP, August 2011. "A shortage of skilled Engineers is threatening to hamper efforts by BP to boost production in the North Sea. BP need 150-300 new workers each year but it cannot find people with the correct skills."Sir James Dyson at his Dyson Group office, August 2011. "Our country is facing a desperate shortage of engineers. There is something like 22,000 graduates each year but 37,000 vacancies. Dyson employs 2,700 across their group."

Now, lets look at the employment figures for those engineers who have been graduates for 6 months. These are figure quoted by Professor Emma Smith of Birmingham University at a conference in September 2011. The Professor uses data taken from Higher Education Statistics Agency, HESA, from their latest survey.

"For Engineering Science, 46.4% of graduates were working in fields directly related to their degree. It is astonishing, in the light of claims of science graduate shortages, that so few new graduates go into related employment. Large numbers of newly qualified engineers report every year that they are working in non-graduate jobs such as cashiers and waiters. It isn't easy or automatic for qualified engineers to get related employment in the UK, despite the purported shortages."

So the well-meaning leaders encourage more to take up engineering at University, but the statistics from street level suggest there aren't that many jobs! If the University tuition fees were not going to rise so much then maybe it would matter less.

One piece of advice for young students is to check the validity of any news article for themselves using HESA job data or use websites such as Christian Muller's given below.

Mr. Christian Muller runs this website - http://www.uk-university-fees-and-student-finance.info/.

Christian spent many years as a Higher Education adviser at a Sixth Form College. Dozens of his past students would return from their Universities with valuable information about their progress. Courses with the best job prospects were identified and the information was always passed on to younger students. His two children were guided to sensible University courses and they now enjoy their secure well paid jobs.

Now, in early retirement, he is most concerned that our youngsters should not 'sleep-walk' their way to a crippling college debt.

If you want to discover more about the ways to avoid unnecessary levels of debt and avoid the misleading hype then visit Christian's website to find out more.

Original article