This might be a test of affordability!
You may wonder what all of this means. Well, here we are talking about the affordability of education.
With soaring tuition fees in the U.S., earning a college degree has become out-of-reach for many average citizens. Yet in order to acquire a respectable job with decent pay, a college education is still required.
So, young Americans with starry eyes and big dreams resort to the only option they have, taking out expensive educational loans. Aware that tuition is rising, they are still taking a gamble on education as a stepping stone to the American Dream.
Later, this gamble turns into a game of survival when the time comes to pay their student loans back.
How students loans can hammer a borrower down
During the 1980s, a woman from Arizona took out three student loans amounting to $8,400. She and her family repaid two loans, however she struggled to pay back the third. She missed out on a few payments and that led her loan servicer to seize her tax refund.
Subsequently, she found that the loan servicer’s record was showing that she had been on loan default status for 30 years; therefore she owed over $36,000! She repeatedly claimed to have made payments, however her credit report was not accurately reflecting such data.
The story mentioned above could be a classic case of misunderstanding and a communication gap between a borrower and her loan servicer. However, in each circumstance, borrowers would be at the receiving end if they miss out on even a few loan payments.
What the Future Holds?
Honestly, the future doesn’t look that encouraging.
Each academic year, the interest rate on student loans is skyrocketing, causing more worries for borrowers and those who are contemplating taking out education loans.
In July of 2014, student loan interest rates for 2014-2015 have increased yet again. It’s an increase by 20% compared to the previous academic year
