It’s no secret that furthering your education in the United States of America doesn’t come cheap. In fact, The USA has some of the most expensive university tuition prices on the planet. Unless they want to get into a specific trade, most students finishing high school have plans on attending university after they graduate. Of course, unless they happen to come from a wealthy family, chances are they are going to have to take a loan out to help them pay the costs of tuition, books, housing, food, and more. And that’s where things started to get out of hand…
The First Student Loans
The very first federal student loans were actually issued in 1958 under the National Defense Education Act (NDEA). Unlike today’s loans, these funds were only offered to specific groups of students: those who were studying things like education, sciences, and engineering. These loans came about in response to the Soviet Union’s satellite launch, when the USA began feeling like they had fallen behind in science and technology, and felt they needed to push more citizens into studying and advancing their programs. But this wasn’t enough for American students, so they decided to do something about it…
Tuition Help For All Students
In 1965, with the Higher Education Act, these federally-backed student loans became available for students studying all types of fields. This was President Lyndon B. Johnson’s initiative which was intended to “to strengthen the educational resources of our colleges and universities and to provide financial assistance for students in postsecondary and higher education”. This was helpful to Americans wanting to further their education because it gave them more resources for equal opportunities in learning and branching out into more diverse fields of study. But the loans available were far from affordable…
What Loans Types Were Originally On Offer?
At first, and up through 2010, there were only two types of federal loans that were available to students: the direct loans which were funded directly by the United States Department of Education, as well as private loans which were funded by private investors but guaranteed by the US government. However, in 2010 these loans were done away with due to the suspicion that these private investors were benefitting too much from these loans at the expense of US taxpayers. While these loans were a real help to students all over the country wanting to further their education, they quickly became more problematic than helpful…
Where The Problems Began
For a few decades, students were comfortably able to take out loans to help them pay for degrees from esteemed universities whose tuitions averaged around $3,000-$4,000 per year. This allowed for minimal loans and an easy enough time to pay them back after starting a career. However, from the 1980’s to the 2010’s, tuition increased by over 200%. That’s quite an enormous markup. This caused students to have to up their loans by thousands of dollars per year. Not only did tuition prices skyrocket, but interest levels did too. There have been a few very unfortunate outcomes to this spike in college tuition prices…
Private Loans
With the federal government simply unable to provide enough resources for students to cover their tuition bills, private loans began surfacing and becoming very popular. Providers like Sallie Mae (now Navient) provide extremely high-interest loans for students who need more funds immediately to cover their tuition and books, as well as other important costs. Banks also began offering student loans to those who needed even more help, despite having federal and private loans, because they’d maxed out the amounts they could take out, even if they didn’t cover the full costs. With so much money being taken out, it was only a matter of time until the situation became dire…
What Does The Situation Look Like Now?
The good news is that more and more students across America are taking advantage of furthering their education. But the bad news…well, it’s really bad. With college tuition rising so drastically, and interest rates getting higher and higher, many students are finding themselves unable to pay back their debts to loan providers. The current student loan, as it stands right now in 2020, is a record-high 1.6 trillion dollars. This is an absolute travesty and has caused havoc among students who average $28,000 of debt when they leave school. Recent graduates are forced to start their careers out with an enormous debt hanging over their heads, which takes many of them over 10 years to pay back, assuming they find a job in the ever-declining job market. But that’s not even the worst news…
The Scammers Have Caught Wind Of The Crisis
Wherever there is suffering, there is someone who finds a way to take advantage of it. And, unfortunately, that is what’s happening nowadays with the student debt being so high. Recent graduates are desperate to get rid of their debt, as it takes such a heavy toll on their lives (both physically and mentally, due to stress and worry). Scammers are taking advantage of these stressed-out former students by offering a too-good-to-be-true solution to their ever-growing student debt.
>> See How Scammers are Duping Student Loan Holders:
What To Look Out For When It Comes To Student Debt Scams
There are a number of tell-tale signs that the person who is providing you a student-loan refinance or repayment service is not telling you the truth. Unfortunately, a lot of former students have had to learn the hard way that these services will steal their money and end up putting them further in the hole. This Better Business Bureau (BBB) representative has some excellent tips on how to steer clear of these all too convincing student debt relief scams.
>> Watch This Video For Tips On How To Stay Safe From Student Loan Scams:
