Is It Possible To Get The Student Loan Debt Crisis Under Control?

Just a few short decades ago, college was a person’s ticket to success. Almost guaranteeing that you would make it farther than you would with just a high school degree, college made financial sense — even if you had to sacrifice to get through it. With college tuition increasing over the past two decades, many graduates and current students alike are finding that the big “payoff” may not come — because once they graduate, they have too much debt to pay off.

There seems to be no end in sight to rising college costs and increased student debt. In fact, it has reached epidemic proportions across Canada. According to the latest release of Statistics Canada, the rate of college tuition has gone up over 3% for undergraduate courses in just the last year. Although that doesn’t seem like a lot, when you consider that the average tuition cost is about $7000, with other specialty programs close to $22,000 a year, that is a lot of debt that continues to accumulate for young kids entering or leaving school.

The student debt loan crisis has created the perfect storm for Millennials, who already have a bad reputation for saving money and having good economic sense. Most of them who are either entering or leaving college with a degree will owe more money than they can ever afford to pay off. With a housing market that is reserved for the rich and famous, and skyrocketing prices locking anyone with an average salary out of buying a single detached home, that will leave Millennials renting and wasting more of their money.

Many college graduates are not even able to find a job to begin to pay off their debt. With the job market already flooded, graduates are being forced to either take low-wage positions or to intern for free in hopes of making their way into a viable position. That has them making, at best, minimum payments and accruing interest at such a rapid pace that there is no way to get ahead of any of it. Statistics indicate that young people currently make up for as much as nearly 19% of homeless people, and at any given time, as much as 10-17% are dependent on food security from the government.

In a response to the “new poverty” seen among young people, governments in places like Ontario have created the Ontario Student Assistance Program, making tuition payments free for as many as 210,000 students. New Brunswick is following suit to help out those living in the province who are considered “low-income.”

Other programs in British Columbia are attempting to make tuition free for those who were formerly in youth care, and have banned unpaid internships by announcing new Federal student co-op programs that prevent companies from taking advantage of those who are without other resources and work for free in hopes of gaining opportunity.

It’s hard to stop an avalanche when it is already in motion. The hope is that with government intervention, things can get back under control. But the problem is so prominent and widespread, many economists wonder who is going to shoulder the cost for all the student loans that students can’t afford to repay. If there are no jobs available for those who get an education, then what difference does it make if you offer free tuition? The sad reality is that it will just be flooding an already-stagnant market that can’t offer jobs to those who have already obtained their education and owe hundreds of thousands in doing so.

A college education no longer affords the recipient the same advantages that it used to. Once a guarantee of more opportunity, it no longer works that way. After spending all the money Millennials had for their future, many are finding that if they can’t even earn a paycheck, their money is gone before they can repay it for an education that has done nothing but dig them into a financial hole. Since many financial institutions and governmental agencies stand to profit from college loans, change is not going to be easy — and an overhaul of the system might be next to impossible.

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