Debt: The Other Four Letter Word! Student Loans, Credit Cards, Dying Every Breath you Take?

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By: Chris Williams

Debt has become the other four letter word, as people are realizing the consequences of their actions in unprecedented numbers in today’s society. This issue isn’t just a problematic matter in the United States; this is a worldwide quagmire, which is literally growing by the day.

Debt has become disease, and there doesn’t seem to be a cure to stem the tides of suffering that so many of us are dealing with at present. There are more questions than answers on how to remedy this unpleasant situation.

As we continue to struggle to get by, the interest rates on our loans continue to rise like the sun. I’ve spoken with many college graduates from different decades, and they’ve uttered the same frustrations about their current perilous financial situations.

How did we get here?

Numerous people are told when they’re growing up that college is their only option, because it’s a cold, dog-eat-dog world out there. But what gets lost in translation during our formative years is the value of a dollar, and how to manage our finances.

Does the fault fall at the doorstep of our elders, or with us for not inquiring about the promise of our futures? Due to our lack of fiscal responsibility, it’s not until we’re adults that we’re forced to deal with these economic misfortunes, and by then it’s rendered inconsequential because the damage has already been done.

Speaking from personal experience, I attended college at a four-year institution and was the recipient of pell grants, but the bulk of the money I received was through federal and state student loans. Within a week from the time I walked across the stage to receive my degree, companies and agencies were calling ad nauseam, wanting to consolidate my outstanding student loans. The result is a 29-year-old man drowning in $45,000+ of student loan debt.

The degree I earned didn’t land the optimal occupation to afford me the luxury of paying back the lolly I owe. Little did I know, by declaring forbearance (delay of payment) on a student loan, your interest rate that was supposedly ‘locked in’ accrues slowly, which increases the principal on the overall sum of your consolidated loan.

Recently, I spoke with one of the representatives for the company that consolidated my student loans. She informed me that at my current rate of paying $200 per month on my loans I wouldn’t be able to pay off my loan until December 23, 2029, but my interest rate would stay ‘locked in’ at 4.25%. It became abundantly clear that I’ll be 49-years-old by that time, and I needed to delve further into the situation.

Simply put, there were options made available to me – such as using forbearance once again – if I were to lose my job for some reason. Defaulting on my loan was also a viable option, but the consequences of choosing that path would result in my interest rate increasing and my credit score being annihilated. This would mean the opportunity of purchasing a house or new car would be an arduous task, to say the very least.

This is a similar predicament that millions of other people are dealing with at the moment. Debt is the 1,000-pound gorilla on our backs, preventing us from climbing the ladder to reach the next chapter in our lives. The future of a country is dependent on how successful their citizens become once they’re integrated into the flow of their economic stream.

So, what does it say for a country when it keeps both the young and older sectors of their society in a consistent, unjust system of financial enslavement where they’re bound and chained continuously? American journalist Ambrose Bierce once said, “Debt is an ingenious substitute for the chain and whip of the slavedriver.

The truth is, debt has become the biggest investment in the economic longevity of various countries, and it may be the very reason why they will succumb to another catastrophic great depression. The modern-day world has enrolled at I.O.U. University, where no one graduates until your debt has been paid in full. The Wall Street Journal published an article in August, 2010 which stated:

Americans owe some $813.9 billion in revolving credit, according to October 2010 figures from the Federal Reserve. Most revolving credit is credit-card debt. Student loans outstanding today,  both federal and private, total some $829.785 billion, according to Mark Kantrowitz, publisher of FinAid.org and FastWeb.com.

By his math, there is $605.6 billion in federal student loans outstanding and $167.8 billion in private student loans outstanding. He estimates that $300 billion in federal student loan debts have been incurred in the last four years.

According to Mint.com, 62% of students that graduate from a four-year public university have an outstanding debt of $20,200, and the nationwide average debt for seniors graduating with loans catapulted from $18,650 in 2004 to $23,200 in 2008. It’s no surprise that Washington, D.C., the home for the U.S. government, has the highest average student loan debt at $29,793.

Per the NatWest Survey in the U.K., the average student loan debt is at £12850 ($18,031US).

Some would argue it’s a person’s singular choice to go to college, but when you’ve been almost brainwashed by the larger society into believing the only way you’ll be successful is by attending college, what are you supposed to do? College is the biggest business there is on earth, period.

Don’t get me wrong, college can cultivate, educate and change an individual for the greater good, but when someone is handcuffed financially by the cost of it for decades after graduation, what’s the point?

The cost of going to an institution of higher learning continues to rise, while the prospect of gaining employment afterwards lessens. There is a grave imbalance at play, and it seems there are no answers to solve this plight. Until corporations stop outsourcing jobs, and countries get back to being innovative in new job creation, students and their incomparable debt will continue to be economic backbone on which our world leans on.

Dying Every Breath you Take = D.E.B.T.

How are you coping with your own student debt? What do you feel the solutions are for those drowning in debt? What is the solution to ensure our future generations are better off?

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