With a seeming end to Covid-19 spikes, shutdowns and uncertainty appearing in the rearview for most adults, there is something lingering that is troubling the minds and wallets of many; student loans. For months during and following the pandemic the U.S. Government has placed a halt on collecting student loan payments for borrowers while also recently ceasing to charge interest as well on existing loans.
This came as a help to many families who experienced varying hardships during the pandemic such as unemployment, homelessness, losing a loved one etc. But now borrowers are crying out for more help! It’s no secret that costs for just about everything has seen an increase in the past few months. Housing costs continue to rise upwards as much as 30% since this time last year while gas prices have also increased all over the country! This is causing student loan debtors to be concerned because inflation simply does not drive employers to provide more wages. With the cost of living increasing so steeply borrowers are finding it difficult to even plan how they would be able to pay their student loan payments should they resume and keep basic family needs met at the same time.
“10K wont even cover the interest on my loans in a year” says twitter user @JMillzDC. While the promise to provide relief sounds good for some, it’s simply not enough for most given the current economy. Remarkably in the US in 2022 there are still states with a minimum wage of $7.25 per hour. Additionally 1 in 3 college students do not graduate within six years of enrolling according to the National Center for Education Statistics. As a result, the majority of college dropouts who took out federal or private student loans are saddled with debt, and no degree to show for it which paints a very startling picture. One fact being that if someone does not yet possess a college degree, they could be subjected to wages as low as $7.25 per hour. Another being that these same individuals could potentially enroll in school, obtain student loans and for any variety of reasons become unable to complete their degree program ultimately worsening their circumstances because now they have the dreaded student loan debt to pay while also effectively not being able to afford basic costs such as housing and groceries.
Given this combination, post covid, increased unemployment, inflation, postponed student loans maybe it’s safe to say student loans are a much bigger issue than bad financial decision making? It seems for many, not all and maybe not most but for many the loans are a burden since wages don’t necessarily correlate to college degrees anyhow.