With a new semester beginning, many students have just gotten through the storm of last-minute financial aid. With a degree in one hand and a bill in the other, many graduates are finding they either don’t have the funds necessary to pay their loans back on time or, in some cases, are unable to pay it back at all.
For the first time in 22 years, tuition at the University of Memphis did not go up. Out of all the institutions governed by the Tennessee Board of Regents, the U of M is the only one that did not face a tuition hike. East Tennessee State University had a tuition hike of 6.9 percent and Tennessee Tech University’s tuition went up 6.2 percent.
Student loan debt has surpassed credit card debt and auto loan debt peaking of over one trillion dollars and growing. It is the most prevalent and increasing form of debt among Americans ages 18 to 24. The average debt for someone is about $24,000, however, some may owe as much as $200,000.
“Sometimes students are surprised by what they have to pay back,” John Rhodes, the manager of enrollment services, said. “I tell students to start managing your loan debt now, not when you leave school.”
According to the Institute for Higher Education Policy, from 2004 to 2009 about 16 percent of degree holding Americans with student loan debt defaulted on their loans, compared with drop-outs who defaulted at 26 percent. Not finishing college is becoming more common, especially among students who go to for-profit-two-year institutions.
The Health Care and Education Reconciliation Act was narrowly passed in 2010 which is supposed to provide relief for students taking federal student loans as of July 1, 2014 by capping monthly payments and making new borrowers eligible for debt forgiveness after 20 to 25 years. There are also the TEACH Grants and the Public Service Loan Forgiveness programs that apply to new teachers or many who pursues work in the public sector — both of which allows debt forgiveness after 10 years.
“If students have any questions or doubts about their student loans come by the Enrollment Services Center and we’ll go over their options with them,” Rhodes said.
According to the Department of Education, from 2001-2002 to 2011-2012, tuition at public institutions increased by 40 percent. With these increases student loan debt is becoming a defining part of 21st century America, and how it is dealt with will have a rippling effect of generations to come.
