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Are Student Loans Worth the Debt?

Updated: Tuesday, February 18 2014, 09:52 AM CST

With nearly 10 Million Americans out of work or under-employed many college bound students question whether a higher education  is worth the hefty price tag.   

As the U.S. Economy improves there's a threat on the horizon of the soaring amount of student loans. 
   
Special Correspondent Kai Jackson reports now on why experts say the large amount of debt could have a ripple effect felt by people across the country.

Now there is a new headache coming to a family near you. Rising defaults on student loans.
 
First Lady Michelle Obama says, "Almost everyone is eligible for some form of financial aid, but student debt now tops 1 trillion."

Going to college is embedded in the american dream.  Yet there's a nightmare now facing graduates and even those who dropout, a mountain of student loans they can't pay off.

It's estimated the average student loan in america is just under $30 thousand dollars. 
 
And there's more than $1 trillion dollars of outstanding student loan debt.
 
Even with that reality First Lady Michelle Obama is leading a media blitz encouraging students to apply for financial aid.

"Through FAFSA the department of education provides more than 150 billion dollars every year in low interest loans, in grants that you don't have to pay back," First Lady Michelle Obama says.

Economist say student loans are now the second largest debt in the average household behind mortgages.

If the debt is massive now, what happens if the government encourages even more people to borrow even more money?
 
Recently, Rep. Michelle Bachman stated that "if you look at the correlation, the federal government has actually increased the cost of education so now there's a trillion in debt outstanding from American kids that doesn't help anyone."

Students find themselves between a rock and a hard place.  They're told they need a college education to get a good job. But many can't get jobs if or when they graduate. Now critics question the wisdom of pushing loans on students who can't pay them back.

Argelia Rodridguez runs a financial aid program for low income students.
She says sadly some students are the victims of broken promises.

"80% of the jobs that are coming around are going to require a college education.some of the schools still unfortunately engage in what we call bait and switch, they'll throw all this money at the kids the first year and then by sophomore year they've disappeared."

At that point students have a choice of taking out loans or dropping out

College Senior Steve Kaye says he think there's clearly a benefit to higher education and I think the government realizes that.  But at the same time they don't know how to get the money to the students in a way that works for them.

Others say loans might not be a problem if students have a way to pay them back.

"so whether that's working in the military for a few years or doing volunteer work I think there are ways students can work off some of those student loans as well, " college freshman Kenny Stesin states.

Argelia Rodriguez says her mission remains the same."What's gonna make me, take me to the future to get me employed to put me in a position to be able to take care of my family, it's college, college is an investment."

Are Student Loans Worth the Debt?


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