Increased Effort to Get Students to Complete College Could Have Huge Negative Effect
Updated: Monday, February 17 2014, 11:28 PM CST
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WASHINGTON, D.C. - As the U.S. economy improves, there's a new threat on the horizon. It's the soaring amount of student loans. As FOX17 Special Correspondent Kai Jackson reports, experts say the debt is so large it could have a ripple effect that will be felt across the country. Going to college is embedded in the American Dream. Yet there's a nightmare now facing graduates and even those who drop out. A mountain of student loans they can't pay off. It's estimated the average student loan in America is just under $30,000. There's more than $1 trillion of outstanding student loan debt. Even with that reality, First Lady Michelle Obama is leading a media blitz encouraging students to apply for financial aid.
Economists say student loans are now the 2nd largest debt in the average household behind mortgages. If the debt is massive now, what happens if the government encourages even more people to borrow even more money? Students find themselves between a rock and a hard place. They're told they need a college education to get a good job, but many can't get jobs if or when they graduate. Now critics question the wisdom of pushing loans on students who can't pay them back.
Argelia Rodriguez runs a financial aid program for low income students. She says sadly some students are the victims of broken promises. At that point, students have a choice of taking out loans or dropping out. Others say loans might not be a problem if students have a way to pay them back.
Argelia Rodriguez says her mission remains the same. A student loan borrower's Bill of Rights has been introduced in Congress. If passed, it would give students bankruptcy protection and stop loan debt from hurting credit scores.
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