Though 26-year-old Storm Ainsley finished schooling years ago, her college experience is not yet behind her. Ainsley currently owes $85,294.76 in student loans, a number that casts shadows on whether she’ll ever live debt-free.
The Santa Rosa, California resident is among millions of student loan debtors across the country who can't pay the bill for their education. According to the Department of Education’s annual study, the number of recent borrowers who defaulted within two years rose to almost 15 percent, the highest rate in almost two decades.
“It does not matter how much I pay, because I will never be able to get on top of the interest that is accruing on my loans,” Ainsley said. “I cannot even describe how angry, how frustrated that makes me, nor can I describe how futile that makes everything seem.”
Ainsley not only has debt from an undergraduate degree in fine arts, but a master’s degree in writing. With bill collectors knocking on her door, she had no other option but to sacrifice her passion for the arts for a secure, $12-an-hour job unrelated to her field.
As college tuitions rise and government aid gets cut, the heavy burden of student debt is causing many to question whether or not higher education is still a worthwhile investment. With debt looming over her, Ainsley can’t help but regret her decision to attend expensive schools.
“I have never had a credit card. I’ve never bought anything that I couldn’t afford other than a good education, and I feel unbelievably stupid for doing so,” she said.
Student debt is especially problematic at for-profit schools, which often offer technical training programs. The sector had overwhelmingly high default rates compared to public and non-profit schools, troubling data that has led the Obama administration and the Department of Education to push for more oversight and regulation.
“[Students] get out of these for-profit schools loaded down with enormous debt. They can’t find a job. They default. The taxpayer ends up holding the bag. Their credit is ruined, and the for-profit institution is making out like a bandit. That’s a problem,” President Barack Obama said in an August 23 speech at Binghamton University in New York.
The department is drafting “rules requiring vocational programs to prove that they are preparing students for gainful employment,” according to Inside Higher Education. These rules would put for-profit colleges through more rigorous examination for receiving federal student aid.
It’s all part of Obama’s overarching proposal to make college more affordable. As a renewal of the Higher Education Act that expires this year, the administration plans to tie financial aid to a college rating system, favoring high-performing colleges when giving grants.
Not only are they changing the ranking system, but the administration also want to focus more on educating the public on the complex subject: Loan counseling and outreach on the Department of Education website will be expanded this fall.
According to Krystle Cobran, the creator of an online student debt aid, the Department of Education’s move to reach out to families during the stressful time is a smart move.
“Often we forget that student loans can create emotional stress on top of practical financial stress,” she said. “To help borrowers navigate student loans effectively, we need to place greater focus on integrating emotional tools for responding to student loan stress with practical financial tools for managing student loan repayment.”
The president hopes to have college ratings established by the 2015 school year and performance-based financial aid by 2018.
Original article from TakePart
- Financial Aid
- student loan