Gratt.info

You’ve probably heard of the rise in student loans default. You may have a child or friend who is facing massive student debt and can’t pay it off. You may even be in that boat yourself. But why are there so many people saddled with a level of college debt they just can’t handle? What is the cause?

There are several causes, and most of them revolve around employability, experts say. For example, Unemployment is on the rise across the board. Both blue collar and white collar jobs are in high demand, leaving many people to fend for themselves. When employers have their pick of experienced, veteran workers willing to work for less, why would they choose someone fresh out of college? This leaves many students out on the street.

A second contributing factor is that the jobs that are available pay less. The median starting wage for an entry level position is down, according to surveys, and that means that many college graduates’ expectations about their earning potential have become unrealistic.

Lastly, costs are high right now. Obviously, gas is up, and there are more technological devices required to be a marketable worker than ever before. But what about mortgages? The price of getting a home loan for first time home buyers is at a high, meaning many graduates cannot afford to take advantage of historic lows in real estate prices. This leaves as renters, not nearly as powerful a group, instead of investing their money.

If these trends continues, student loans will continue to default. What can be done about it?

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