Student Loans are an International Pain in the Butt
America has the most expensive higher education system in the developed world, with student loan debt to prove it.
According to US News, for the 2013-2014 school year, average tuition and fees at public colleges and universities in the US was close to $8,400 for students studying in their home state and nearly $19,100 for those paying for out-of-state tuition. 37 million Americans now have outstanding student loans, totaling $1 trillion in debt.
Although these astronomical numbers remain unmatched abroad, student loan debt is becoming a growing international problem.
In the United Kingdom the total outstanding student loan balance is £40.3 billion (roughly $64.8 billion). Unlike in the US, a debtor in the UK is not required to make payments on their loans until they reach a certain annual fiscal threshold, which was £16,365 (roughly $25,500) for 2012.
This threshold makes the default rate in the UK very low, with 98% of borrowers meeting their obligations, but for students who are educated in the UK and then relocate to other places in the European Union, the default is a shocking 45%.
A similar problem is occurring in Australia, where more than half a billion dollars is owed by people no longer living within the country. The country’s previously forgiving student loan system, where borrowers had 35 years to payback loans, has now become much stricter, allotting only 15 years for repayment.
In Japan, as of 2012, student loan renewals are now being based on academic performance, where borrowers are warned if they are under-preforming. To continue to receive loans, students are required to renew their applications every spring, the beginning of the school year. This year, 600 students lost their loans due poor performance.
Some international colleges, including those found in Sweden, Argentina and Iceland, offer free tuition. Nonetheless, government loans are still taken by students who are unable to pay for other fees, such as cost of living.
Debt paired with a poor economic climate and lessened job opportunities has lead to student protests across the globe.
Within the US, there is prospective legislation that would call for universal income-based repayment on all federal student loans with payroll withholdings, which would be similar to the system seen in the UK. But with 7 million borrowers currently in default, student loan debt shows no signs of slowing.
When faced with such astronomical figures, there is no denying that the American higher education system is broken.
College is supposed to be the best four years of your life, but the sad reality is that you may end up paying for those four years for the rest of your life.
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