Dollar Exchange Rate, World Economy, Boom, Economy

In the present times, politicians can’t agree on anything, but one glimpse of hope that appears to inspire the currently elected officials to reach across the aisles is education. It is kind of difficult to understand that higher education is not the only way to reach the middle class (or the 1% if you are quite ambitious) it is also crucial to America’s future prosperity. Yet those same politicians who would argue for the prioritization of education are turning a blind eye to the fact that student loan debt is crippling millions of Americans. The numbers are quite staggering.

Education-related debt has impacts to more than 44 million people (around 1 in 4) who owe $1.5 trillion total, making the burden of education the country’s second largest debt after consumer mortgages. Monthly student loan payments through have increased from $227 in 2005 to $393 in 2016, according to the Federal Reserve and graduates owe more for tuition and books than we do for the roof over our heads.

Given the above situation and with graduates walking away with an average of $37,172 in loans, it does not take an economist to see that America’s future generations have been handed an albatross to wear along with their caps and gowns. But of course, that albatross is not just the student’s problem- it could well be the next  crisis that could strangle the American economy unless we act now.

If once in your life you had student loan, it may be hard to understand what it feels like to be so financially burdened before you have even earned your first paycheck. It is quite terrifying. Always remember that the better everyone’s standard of living , the more money our country has to run. Since almost all student loans must be paid back with after tax dollars, tat makes them even more of a burden for the monthly budget of millions of American’s who will be dumping their income straight into student loan payments, not spending on products, services and other purchases that keep our economy churning.

This is, of course, under the assumption that folks even continue to pay their student loans- the default rate has doubled from 2003 to 2011 and a great 40% of borrowers are expected to fall behind 2023, according to research from the Brookings Institute. In other words, the damage that student loan debt can do to the economy is not going to wake us up one morning with a slap in the face, rather it is a slow but steady sinkhole that is quietly gobbling up any hope for sustainable long term growth.

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