The article In Debt to Your Degree, by Brian Taylor discusses various reasons why people are in so much debt after college. Taylor states the main two reasons why undergraduates, graduate students, and people in the work force are experiencing so much debt from college has to do with increasing tuition rates and the use of credit cards with high interest rates. Tuition costs are going up, federal financial aid is declining and students are then forced to turn to private loans with possibly atrocious interest rates. With high interest rates, paying off the balance can take longer and longer. With that being said, many students only pay off the minimum payment required. Only paying the minimum will most likely take a student decades to pay off a loan of upwards of $30,000 or more.
Credit cards are also a contributing problem. Students sign up for credit cards with an interest rate of upwards of 20% to buy books, supplies, even food and rent. This trend has contributed to the increases in debt students have accumulated.
I felt this article was extremely simple, clear, and could possibly open the eyes of students making poor financial decisions during their years as a student. It broke down the common problems associated with the relevant debt problems of students. The majority of this information was nothing new to me. I am shocked when people sign up for credit cards with ridiculously high interest rates and I am baffled by people who cannot figure out why they never pay off bills when they only pay the minimum. The minimum pays off mostly the interest accrued and not the principal which in the end keeps the person in debt from making much progress.
Overall I feel that this article was worth reading and could have some real value if read by students entering college or about to graduate. New students will see what traps to avoid while graduating students can learn about repayment methods and financial choices that will affect their overall debt.
Credit cards are also a contributing problem. Students sign up for credit cards with an interest rate of upwards of 20% to buy books, supplies, even food and rent. This trend has contributed to the increases in debt students have accumulated.
I felt this article was extremely simple, clear, and could possibly open the eyes of students making poor financial decisions during their years as a student. It broke down the common problems associated with the relevant debt problems of students. The majority of this information was nothing new to me. I am shocked when people sign up for credit cards with ridiculously high interest rates and I am baffled by people who cannot figure out why they never pay off bills when they only pay the minimum. The minimum pays off mostly the interest accrued and not the principal which in the end keeps the person in debt from making much progress.
Overall I feel that this article was worth reading and could have some real value if read by students entering college or about to graduate. New students will see what traps to avoid while graduating students can learn about repayment methods and financial choices that will affect their overall debt.
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