The growing debt statistics show how this number has affected various sectors of the country which in turn affects the overall economy. Student debt that has now crossed $1 trillion is considered of the biggest debt disaster after mortgage. The escalating college costs has resulted in restricting many student from further pursuing their educational goals or getting under heavy loan burdens. Even students who enroll into colleges and universities after opting for student loans leave their studies before graduation. Reason? The college costs, the increasing debt and the attraction of earning money even before they get their degree all serve as a reason for this. All of these factors are correlated in then giving the economy unskilled labor, without the complete set of skills required for a particular job.
- Reasons as to why Student Debt is being a Great Obstacle in Developing Skilled Labor:
The market has evolved radically with greater demand for educated and skilled labor. This emerging demand for skills, particularly specialized skills results in lower employment rate. Due to this reason the United States demand and focus more on completion of education. However if we measure Unskilled labor, through educationalaccomplishment, they don’t get better jobs particularly requiring at least a high school diploma; whereas, employers focus more on hiring skilled labor with additional skills and education. Since the demand for unskilled labor has dropped down; the overall labor quality and number has also suffered. The reason for production of more unskilled labor as compared to skilled is somehow a result of student debt issues faced by almost every student. The drastic growth in college fee and interest rates over student loans, leads to frustrating students and thus forcing them to make decisions like getting a job before completion of their studies.
- Why College Cost is Rising So Rapidly:
Even with these problems, there is still a demand for education among a big number of American Population. This demand and the increasing debt on American economy have resulted in the sudden increase in college and tuition fees. Specifically for colleges with a limited number of enrollments, they meet this supply and demand gap with by overall increasing the college tuition. With employers raising their job criteria and hiring students with either a graduate degree or a diploma, the demand for education has recently increased which leads to growing college fees.
- How College Costs can be Reduced a More Affordable Level:
When college students opt for student loans they need proper planning rather than mindless decisions like dropping out of college. Even before college starts a properly devised plan can save students from breaking their banks. In order to achieve this students, while they are still in college should start looking out for earning opportunities and plan out a budget. What most students do is they do draft a budget plan but fail to stick to it ending up with greater debt resulting from credit cards or other unnecessary expenses.
- Number of Students that ultimately End up without a College Degree After getting Admitted:
According to a research, currently the overall national high school graduation rate has increased to 80 %. This percentage if thoroughly calculated means almost about one in five students did not graduate high school along with their fellow classmates. With the number of jobs which require postsecondary education doubled over the last few
Years because of high skills requirements by employers, this 80% and still growing percentage is left behind without either no jobs or low income jobs. If we talk about 1990, U.S. was the first in ranks with a complete four-year degree among 25-34 year olds. This number today has fallen down to 12 and researchers predict this number will fall down even more in the coming years.
- Student Loans being a Shortsighted Policy Hurting Economy of a Country in the Long Term:
If we observe the recent debt crisis, unemployment, and unskilled labor are all somehow rooting from previous shortsighted and not well thought of loan policies by government. The policies ultimately resulted in disturbing the economy in some way or the other. However, in recent years, federal government has come up with more practical and flexible policies. In order to meet this huge gap created by past policies students should opt for subsidized and federal loans. Federal loans come with great benefits offered by the government to provide people with easy loan policies and relief on loan repayments.
Government strategists and policy makers should invent more policies to provide relief to students in terms of college fees and loans. Such programs and policies will eventually encourage students in pursuing and completing higher education. This will later serve as a catalyst in improving the standard of labor and create more employment opportunities.
