is over $70 Billion. (11% people answered this)
is more than the yearly tuition of all students in 2- and 4-year colleges and universities combined. (7% people answered this)
costs the Department of Education over $1 Billion in fees to collection agencies each year. (6% people answered this)
all of the above. (67% people answered this)
none of the above. (6% people answered this)
204 people answered.
Correct answer is: all of the above.
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The article below provides an arresting look at the effects mismanaged and defaulted student loans have on individuals and the country as a whole:
We are helping people understand financial realities and make better decisions.
The overwhelming majority of Americans have not been taught how to effectively think about and use money--we want to change that. We want to provide ways for America to become a financially literate nation through education and action.
This cause is run by Mindblown Labs, a social enterprise that is building a mobile game which teaches and emphasizes sound financial principles.
An overwhelming majority of students leave high school without basic financial literacy. Many of these students then take out loans to pay for a college education, but often are not equipped to understand the terms of the loans (including repayment and relief). These same students are disproportionately unemployed and underemployed. This gap in financial education and lack of income cause college graduates to default on their loans at a high rate, injuring their personal financial histories and collectively damaging the overall national credit landscape, as a result.
It doesn't have to be this way. If you are a student and have or are planning to have student loans, you can take the following steps right now to reduce your risk of default:
1) Know your loan agreement and create a plan—figure out your minimum monthly payment and learn about deferment and forbearance, in case you hit a stretch of unemployment.
2) Be prepared to start paying off your loan as soon as you collect your diploma. As of June 2012, there is no longer a grace period on loan payments for new graduates.
3) Open a savings account with a responsible financial institution. During the course of several months, save enough money to cover a few months of your minimum loan monthly payment, in case you become unemployed at any time. (This might seem like a large amount to save, but it's easier to save money than it is to raise money when you're having hard times.)
Image credit: http://www.flickr.com/photos/bookgrl/1019231338/sizes/m/